Russia’s revanchism, together with America’s isolationism, is forcing Europe to pursue massive investments in defense, possibly including its own nuclear deterrent. This represents a radical shift in mindset for the European Union, nowhere more so than in Germany.
TEL AVIV – When Russian President Vladimir Putin launched his full-scale invasion of Ukraine in February 2022, he knew that he was upending Europe’s security order. But this was more of a tactical gambit than a calculated strategy, and he could not have predicted what would follow. Though Donald Trump’s return to the White House has caught Europe flat-footed, it can still keep Putin from walking away a winner.
For now, Putin seems to hold all the cards. The transatlantic relationship is fracturing, as Trump’s isolationist administration criticizes its European allies and casts doubt on his commitment to NATO. Worse, Trump appears to be aligning the United States with Russia in the Ukraine war. While he has threatened to impose new sanctions and tariffs on Russia until a ceasefire and peace deal are reached, he has blamed Ukrainian President Volodymyr Zelensky for the fighting and suspended military aid and intelligence support for Ukraine (now apparently set to resume).
But Europe still has a chance to turn things around. Already, it is abandoning its post-Cold War “end of history” mindset, according to which international law reigned supreme, European militaries were for keeping peace, not fighting wars, and the US could be counted on to safeguard Europe’s security.
Finland and Sweden were perhaps the first to realize that “history is back,” and their accession to NATO – in 2023 and 2024, respectively – provided a major boost to the Alliance’s northern flank. Now the European Union also appears to be coming to terms with its new security situation, having just announced an $840 billion rearmament plan. Even Germany, for which the return of history is particularly fraught, is preparing to rearm: incoming Chancellor Friedrich Merz and his likely coalition partners have agreed to create a €500 billion ($544 billion) infrastructure fund and loosen fiscal rules to allow for greater investment in defense.
The significance of this move should not be underestimated. Since the end of World War II, Germany has eschewed hard power in favor of the soft kind, serving as an engine of European integration and a bulwark of the rules-based world order. Beginning in the 1960s, this included the pursuit of “constructive engagement” – a foreign-policy approach known as Ostpolitik – with the Soviet Union and then Russia. This explains former Chancellor Angela Merkel’s embrace of Russian energy supplies, despite the objections of other EU members and the US.
Putin’s full-scale invasion of Ukraine drove a stake through the heart of Ostpolitik. Within days, Merkel’s successor, Olaf Scholz, announced an “epochal change” (Zeitenwende) in Germany’s defense and foreign policy. But it is Merz who is set to oversee a true break from Germany’s postwar past – a change that will require the country to confront the most daunting, destructive ghosts of its history.
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For starters, there is the fiscal revolution. Germany’s frugality has been a source of considerable tension in the EU, particularly during the eurozone debt crisis of the early 2010s. But Germans – not least Merkel – recalled all too well how hyperinflation had paved the way for the rise of Adolf Hitler, and in 2009 Merkel’s first government introduced a constitutional restriction on structural budget deficits to 0.35% of GDP annually, also known as the “debt brake” (Schuldenbremse). Against this backdrop, Merz’s planned overhaul of borrowing rules – including the modification and possible elimination of the debt brake – represents a radical change in Germany’s priorities.
More broadly, Merz appears prepared to embrace European leadership. Despite being the EU’s largest economy, Germany has long been reluctant to assume a genuine leadership role in Europe, particularly in the security domain. The combination of Russian revanchism and US isolationism, however, has made this stance untenable. As Europe’s most populous country, situated in the continent’s “geostrategic center,” Merz says, Germany must “take greater responsibility for leadership” on defense.
Any effort to keep Europe secure starts with Ukraine. As it stands, Trump wants to have his cake and eat it: “negotiate” a peace deal – which will almost certainly involve capitulation to Russia and an economic shakedown of Ukraine – then walk away and let Europe enforce it. But what good is a peace broker who offers no guarantees?
To avoid a repeat of the Munich Agreement of 1938 – when France and Britain forced Czechoslovakia to cede territory to Hitler, setting the stage for WWII – Europe must step up quickly to improve Ukraine’s position on the battlefield and, thus, at the negotiating table. Fortunately, substituting lost US financial aid will not be as difficult as Trump would have us believe: to date, Europe has provided far more support for Ukraine’s war effort in dollar terms than the US has. Fulfilling the weapons gap would, however, be far more challenging and probably impossible in the all-important short term.
Once a peace agreement is reached, Europe will have to act as its guarantor – and that means delivering effective deterrence against Russian aggression. A credible nuclear umbrella is essential. That is why Merz has suggested replacing US nuclear warheads in Europe with French and British alternatives. There is even talk of Germany becoming a nuclear power itself.
When NATO intervened in the Kosovo War in 1999, Germany’s then-chancellor, Gerhard Schroeder, ruled that sending ground troops to fight in a country that had once been occupied by Hitler’s Wehrmacht was “unthinkable.” Today, as Merz seems to recognize, the unthinkable has become necessary. Only if Germany – and Europe as a whole – puts aside its moral and political inhibitions can it continue to perform its most important role: as a global force for peace and a defender of democratic principles.
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US President Donald Trump’s import tariffs have triggered a wave of retaliatory measures, setting off a trade war with key partners and raising fears of a global downturn. But while Trump’s protectionism and erratic policy shifts could have far-reaching implications, the greatest victim is likely to be the United States itself.
warns that the new administration’s protectionism resembles the strategy many developing countries once tried.
It took a pandemic and the threat of war to get Germany to dispense with the two taboos – against debt and monetary financing of budgets – that have strangled its governments for decades. Now, it must join the rest of Europe in offering a positive vision of self-sufficiency and an “anti-fascist economic policy.”
welcomes the apparent departure from two policy taboos that have strangled the country's investment.
TEL AVIV – When Russian President Vladimir Putin launched his full-scale invasion of Ukraine in February 2022, he knew that he was upending Europe’s security order. But this was more of a tactical gambit than a calculated strategy, and he could not have predicted what would follow. Though Donald Trump’s return to the White House has caught Europe flat-footed, it can still keep Putin from walking away a winner.
For now, Putin seems to hold all the cards. The transatlantic relationship is fracturing, as Trump’s isolationist administration criticizes its European allies and casts doubt on his commitment to NATO. Worse, Trump appears to be aligning the United States with Russia in the Ukraine war. While he has threatened to impose new sanctions and tariffs on Russia until a ceasefire and peace deal are reached, he has blamed Ukrainian President Volodymyr Zelensky for the fighting and suspended military aid and intelligence support for Ukraine (now apparently set to resume).
But Europe still has a chance to turn things around. Already, it is abandoning its post-Cold War “end of history” mindset, according to which international law reigned supreme, European militaries were for keeping peace, not fighting wars, and the US could be counted on to safeguard Europe’s security.
Finland and Sweden were perhaps the first to realize that “history is back,” and their accession to NATO – in 2023 and 2024, respectively – provided a major boost to the Alliance’s northern flank. Now the European Union also appears to be coming to terms with its new security situation, having just announced an $840 billion rearmament plan. Even Germany, for which the return of history is particularly fraught, is preparing to rearm: incoming Chancellor Friedrich Merz and his likely coalition partners have agreed to create a €500 billion ($544 billion) infrastructure fund and loosen fiscal rules to allow for greater investment in defense.
The significance of this move should not be underestimated. Since the end of World War II, Germany has eschewed hard power in favor of the soft kind, serving as an engine of European integration and a bulwark of the rules-based world order. Beginning in the 1960s, this included the pursuit of “constructive engagement” – a foreign-policy approach known as Ostpolitik – with the Soviet Union and then Russia. This explains former Chancellor Angela Merkel’s embrace of Russian energy supplies, despite the objections of other EU members and the US.
Putin’s full-scale invasion of Ukraine drove a stake through the heart of Ostpolitik. Within days, Merkel’s successor, Olaf Scholz, announced an “epochal change” (Zeitenwende) in Germany’s defense and foreign policy. But it is Merz who is set to oversee a true break from Germany’s postwar past – a change that will require the country to confront the most daunting, destructive ghosts of its history.
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At a time of escalating global turmoil, there is an urgent need for incisive, informed analysis of the issues and questions driving the news – just what PS has always provided.
Subscribe to Digital or Digital Plus now to secure your discount.
Subscribe Now
For starters, there is the fiscal revolution. Germany’s frugality has been a source of considerable tension in the EU, particularly during the eurozone debt crisis of the early 2010s. But Germans – not least Merkel – recalled all too well how hyperinflation had paved the way for the rise of Adolf Hitler, and in 2009 Merkel’s first government introduced a constitutional restriction on structural budget deficits to 0.35% of GDP annually, also known as the “debt brake” (Schuldenbremse). Against this backdrop, Merz’s planned overhaul of borrowing rules – including the modification and possible elimination of the debt brake – represents a radical change in Germany’s priorities.
More broadly, Merz appears prepared to embrace European leadership. Despite being the EU’s largest economy, Germany has long been reluctant to assume a genuine leadership role in Europe, particularly in the security domain. The combination of Russian revanchism and US isolationism, however, has made this stance untenable. As Europe’s most populous country, situated in the continent’s “geostrategic center,” Merz says, Germany must “take greater responsibility for leadership” on defense.
Any effort to keep Europe secure starts with Ukraine. As it stands, Trump wants to have his cake and eat it: “negotiate” a peace deal – which will almost certainly involve capitulation to Russia and an economic shakedown of Ukraine – then walk away and let Europe enforce it. But what good is a peace broker who offers no guarantees?
To avoid a repeat of the Munich Agreement of 1938 – when France and Britain forced Czechoslovakia to cede territory to Hitler, setting the stage for WWII – Europe must step up quickly to improve Ukraine’s position on the battlefield and, thus, at the negotiating table. Fortunately, substituting lost US financial aid will not be as difficult as Trump would have us believe: to date, Europe has provided far more support for Ukraine’s war effort in dollar terms than the US has. Fulfilling the weapons gap would, however, be far more challenging and probably impossible in the all-important short term.
Once a peace agreement is reached, Europe will have to act as its guarantor – and that means delivering effective deterrence against Russian aggression. A credible nuclear umbrella is essential. That is why Merz has suggested replacing US nuclear warheads in Europe with French and British alternatives. There is even talk of Germany becoming a nuclear power itself.
When NATO intervened in the Kosovo War in 1999, Germany’s then-chancellor, Gerhard Schroeder, ruled that sending ground troops to fight in a country that had once been occupied by Hitler’s Wehrmacht was “unthinkable.” Today, as Merz seems to recognize, the unthinkable has become necessary. Only if Germany – and Europe as a whole – puts aside its moral and political inhibitions can it continue to perform its most important role: as a global force for peace and a defender of democratic principles.