WEBVTT - Here's Why Europe is Unprepared To Defend Itself 0:00:02.440 --> 0:00:09.600 Bloomberg Audio Studios, Podcasts, radio news. I'm Caroline Hepkee, and 0:00:09.680 --> 0:00:12.680 this is Here's Why, where we take one news story 0:00:12.920 --> 0:00:15.360 and explain it in just a few minutes with our 0:00:15.400 --> 0:00:21.200 experts here at Bloomberg. In nineteen eighty nine, the Berlin 0:00:21.280 --> 0:00:26.720 Wall fell and the US became the world's only military superpower. NATO, 0:00:26.920 --> 0:00:30.240 the alliance that was founded forty years earlier on a 0:00:30.280 --> 0:00:35.400 pact of mutual defense, had effectively achieved its aim. But 0:00:35.560 --> 0:00:39.080 now that same alliance faces a new threat from its 0:00:39.120 --> 0:00:43.640 old adversary, and possibly another one from its largest member. 0:00:44.479 --> 0:00:48.800 Russia's invasion of Ukraine has created an inflection point for 0:00:48.920 --> 0:00:52.080 the military alliance. It's something That's been made all the 0:00:52.200 --> 0:00:57.040 more acute by Donald Trump's frequent criticism, both whilst he 0:00:57.160 --> 0:00:59.320 was in office and now that he's running for a 0:00:59.400 --> 0:01:01.240 second I have. 0:01:01.320 --> 0:01:08.360 Been very very direct with Secretary of Staltenberg and members 0:01:08.400 --> 0:01:12.360 of the Alliance in saying that NATO members must finally 0:01:12.400 --> 0:01:20.480 contribute their fair share and meet their financial obligations. NATO 0:01:20.600 --> 0:01:23.560 was busted until I came along. I said, everybody's going 0:01:23.560 --> 0:01:26.240 to pay. They said, well, if we don't pay and 0:01:26.280 --> 0:01:29.600 we're attacked by Russia, will you protect US. I said, 0:01:29.840 --> 0:01:34.319 you didn't pay. You're delinquent. He said, yes, let's say 0:01:34.319 --> 0:01:36.920 that happened. No, I would not protect you. In fact, 0:01:37.000 --> 0:01:39.720 I would encourage them to do whatever the hell they want. 0:01:39.760 --> 0:01:43.080 You got to pay. This summer, advisors for the Republican 0:01:43.120 --> 0:01:47.840 presidential nominee floated the idea of demanding that NATO allah 0:01:47.880 --> 0:01:51.200 Is spend three percent of their GDP on defense, a 0:01:51.240 --> 0:01:54.720 warning shot that signals even more tension if the former 0:01:54.800 --> 0:01:58.960 president does return to the White House. So here's why 0:01:59.160 --> 0:02:03.200 Europe is unprepared to defend itself and why it may 0:02:03.280 --> 0:02:09.120 need to. Joining me now to discuss is Bloomberg's executive editor, 0:02:09.160 --> 0:02:13.919 Flavia Kraus Jackson, who oversees our EMEA and Latin America 0:02:14.040 --> 0:02:18.000 Economics and government coverage. Lavia, thank you so much. How 0:02:18.080 --> 0:02:20.320 much of a concern is it in Europe that a 0:02:20.360 --> 0:02:25.240 Trump administration could pull the US back from its native commitment? 0:02:25.480 --> 0:02:27.920 Short answer is extreme worry. And I think you know, 0:02:28.080 --> 0:02:31.400 is your able to defend itself? Actually we can't. There's 0:02:31.440 --> 0:02:35.000 been chronic underfunding on the defense spending. And you can 0:02:35.120 --> 0:02:39.000 argue that Trump, with his sort of outlandish talk, has 0:02:39.080 --> 0:02:42.160 actually given Europe the proverbial kickup to bottom that it needed. 0:02:42.240 --> 0:02:43.800 And you know, even when you look at someone like 0:02:43.880 --> 0:02:48.120 Jen Staltenberg, the outgoing NATO Secretary General, sort of eccentially 0:02:48.160 --> 0:02:52.560 acknowledges that much. And Rutter, who was a former Dutch 0:02:52.639 --> 0:02:55.720 prime minister who's now incoming known as a Trump whisperer, 0:02:55.800 --> 0:02:58.280 has essentially been saying listen, He's been saying the quiet 0:02:58.320 --> 0:03:01.399 part out loud, folks. We really need to be able 0:03:01.440 --> 0:03:03.480 to do it. I mean, the problem, of course is 0:03:03.560 --> 0:03:07.160 having diagnosed the problem, how do you fix it? Because 0:03:07.560 --> 0:03:11.000 the essential problem here is that you have twenty first 0:03:11.040 --> 0:03:14.480 century wars with twenty century kit and there wasn't really 0:03:14.639 --> 0:03:18.359 an understanding of where the conflict would be. Like hindsight 0:03:18.400 --> 0:03:21.800 being twenty twenty, we all remember President Macran saying that 0:03:21.880 --> 0:03:24.960 NATO was brain dead. We also remember NATO essentially kind 0:03:24.960 --> 0:03:28.040 of putting its focus more in the Middle East with Syria, 0:03:28.200 --> 0:03:31.280 so sort of it didn't almost see coming the conflict 0:03:31.280 --> 0:03:34.320 in Ukraine, even though the writing was kind of on 0:03:34.360 --> 0:03:37.680 the wall terms of Russian expansionism right twousand and eight, 0:03:37.720 --> 0:03:43.040 Georgia twenty fourteen, Annexation of Crimea twenty twenty two, sending 0:03:43.040 --> 0:03:45.000 the jets to Syria. So there's a question of why 0:03:45.080 --> 0:03:47.920 NATO hadn't pivoted in the way it should have. 0:03:48.240 --> 0:03:51.200 And even to me a non defense expert, I can 0:03:51.280 --> 0:03:55.800 see from the data, you know, how few planes, how 0:03:55.920 --> 0:03:59.480 few ships. The comparison between Europe, the US and other 0:03:59.520 --> 0:04:05.000 countries China, for example, it is starkly illustrated. How big 0:04:05.080 --> 0:04:08.080 is Europe's fighting force? Does it have the capability then 0:04:08.240 --> 0:04:11.840 to act without US backing the other? Big big question? 0:04:12.320 --> 0:04:14.520 It simply can't, right, I mean, and you're sort of 0:04:14.520 --> 0:04:16.719 scraping the barrel right now. Twenty three out of the 0:04:16.760 --> 0:04:20.200 thirty two members are hitting the two percent target. Even 0:04:20.200 --> 0:04:22.120 if they were to up this to three point five, 0:04:22.520 --> 0:04:25.720 it still wouldn't be enough. You can't conjure an army 0:04:25.760 --> 0:04:27.920 out of nothing. And it's not just about the numbers. 0:04:28.160 --> 0:04:30.600 It's also about the quality of the kit, the training. 0:04:30.880 --> 0:04:34.600 If it's been basically left to gather rust. You're now 0:04:34.600 --> 0:04:36.680 in a situation where you've got the check initiative, you're 0:04:36.720 --> 0:04:40.320 having to revive old Slovak factories. In the meantime, you 0:04:40.320 --> 0:04:43.080 have Putin, who's turned his economy into a war economy, 0:04:43.120 --> 0:04:46.800 pumping the money. So Europe simply isn't able to keep 0:04:46.880 --> 0:04:49.520 up with that, And the most important point is is 0:04:49.600 --> 0:04:53.880 you as willing to keep its commitment because as we 0:04:53.880 --> 0:04:56.880 well know, there could be a change of God. Trump 0:04:56.960 --> 0:04:59.960 is the worst case scenario for Zelenski. But I don't 0:05:00.000 --> 0:05:01.520 I think we should assume that things are going to 0:05:01.560 --> 0:05:05.039 be that much better under a Harris administration, especially when 0:05:05.040 --> 0:05:07.720 you see it to a degree what some might say 0:05:07.760 --> 0:05:10.480 the double standard. I mean, if you have a crisis 0:05:10.480 --> 0:05:13.760 in Israel with Hamas and Hizbola, you're essentially giving a 0:05:13.800 --> 0:05:17.520 carte blanche to NITAYAHUO. No matter how tense that relationship is, 0:05:17.560 --> 0:05:20.320 it's still the more important relationship. It's still seen as 0:05:20.400 --> 0:05:23.159 much more vital to the US, and the US simply 0:05:23.279 --> 0:05:26.400 cannot sort of be the world's policeman of fighting two 0:05:26.440 --> 0:05:28.960 conflicts and potentially even a third one in Taiwan. 0:05:29.240 --> 0:05:32.320 The head of the UK's Armed Forces has talked about 0:05:32.360 --> 0:05:34.839 the need to be ready for a major direct conflict 0:05:34.839 --> 0:05:37.680 by twenty twenty seven. This's got a lot of eyeballs. 0:05:38.120 --> 0:05:40.840 You know that it was so soon, you know, a 0:05:40.920 --> 0:05:43.560 major war increasingly likely for Europe. 0:05:43.839 --> 0:05:46.280 Yeah, absolutely, twenty twenty seven is the sort of the 0:05:46.360 --> 0:05:48.400 day that everyone has in mind in terms of when 0:05:48.440 --> 0:05:52.159 potentially China decides that's when it's going to go for it, right, 0:05:52.320 --> 0:05:54.800 So that data is sort of out there in the ether. 0:05:54.920 --> 0:05:56.600 But you know, there was also the words of a 0:05:56.680 --> 0:05:59.960 General Sir Patrick earlier this summer that kind of revives 0:06:00.120 --> 0:06:03.400 question about UK conscription. Right, if you think back, it 0:06:03.440 --> 0:06:05.440 was in the Great Wars that there was a conscription 0:06:05.680 --> 0:06:08.000 and some of his words were slightly misinterpreted, but he 0:06:08.120 --> 0:06:12.640 essentially reintroduced the topic of like how fit is the UK, 0:06:13.200 --> 0:06:15.640 especially sort of post Brexit. Right, you have France, it's 0:06:15.640 --> 0:06:18.599 the nuclear power, you have the UK. You have Germany 0:06:18.680 --> 0:06:21.480 for all sorts of reasons that we know well is 0:06:21.480 --> 0:06:24.240 an economic power, but not a military one in spite 0:06:24.279 --> 0:06:26.360 of having committed one hundred billion. That's a very long 0:06:26.440 --> 0:06:29.640 term concept. So when you're looking at the numbers, what 0:06:29.800 --> 0:06:32.320 could France and the UK can draw between themselves in 0:06:32.440 --> 0:06:35.159 terms of men and within a month you're looking at 0:06:35.160 --> 0:06:38.880 maybe twenty thousand for France and about thirty twenty thousand 0:06:38.880 --> 0:06:41.560 for the UK. That simply isn't very much, especially when 0:06:41.600 --> 0:06:45.680 you sort of compare that to the terrible figures and casualties. 0:06:45.720 --> 0:06:49.280 You know, thirty one thousand Ukrainian casualties, so when you're 0:06:49.320 --> 0:06:52.120 playing the sort of the numbers game, you can see 0:06:52.200 --> 0:06:56.120 how in Russia can play the long game and wait 0:06:56.160 --> 0:06:56.520 it out. 0:06:56.800 --> 0:06:59.520 That was, of course, General Sir Patrick Sanders who made 0:06:59.560 --> 0:07:03.160 that comment around conscription in the UK, and you only 0:07:03.200 --> 0:07:05.839 have to look at the newspaper coverage at the time 0:07:05.920 --> 0:07:10.240 of those comments that understand the gap between public understanding 0:07:10.400 --> 0:07:12.960 and this kind of reporting and what the military and 0:07:13.000 --> 0:07:15.600 what the defense industry is kind of thinking about. My 0:07:15.680 --> 0:07:19.280 thanks to Bloomberg's executive editor Flavia kraus Jackson for joining 0:07:19.320 --> 0:07:23.120 us for more explanations like this one from our team 0:07:23.240 --> 0:07:26.560 of two thousand, seven hundred journalists and analysts around the world. 0:07:26.880 --> 0:07:29.720 Search for Quick Take on the Bloomberg website and the 0:07:29.720 --> 0:07:35.000 Bloomberg Business app. I'm Caroline Hepger. This is Here's Why, 0:07:35.240 --> 0:07:38.160 and we'll be back next week with more. Thanks for listening.