MUNICH MOMENT OF TRUTH

Munich – February 16th

17/02/2025 Paulius Kuncinas.

Paulius Kuncinas at Munich Security Conference

Those whom God wishes to destroy, he fist deprives of reason. There was indeed plenty of perceived ‘madness’ and creative destruction going on at Munich Security Conference (MSC) last week.

On the sidelines of the conference, I witnessed extreme pessimism, fear of unreliable US, anger and confusion over exclusion of Europe from Ukraine peace talks. Everyone was expecting lighting and thunder from Vance’s speech. Instead, they received a lecture on democratic values sidestepping the elephant in the room ‘future of Ukraine peace talks’.

Yet paradoxically at the same time I witnessed high hope that Europe is witnessing a moment of awakening and unity. Finally after years of dithering this is the moment of truth and reckoning.

Once emotions and rhetoric has subsided the hard reality remains pretty simple. The question is how is Europe going to provide security to Ukraine? Whose soldiers will be guarding the 3,000 km front and who will pay for it? Everyone agrees we need a lasting peace in Ukraine not just a temporary truce.

The formulas and mechanisms for funding such emergency initiatives are well known and tested. The covid fund (Resilience Recovery Fund – RRF) was set up at a relatively short notice and raised more than 700 bn euros using joint and several guarantees by EU members states.

As Enrico Letta pointed out to us in Paris recently, we still have idle capacity with European Stability Mechanism (ESM) that could easily offer funding capacity of 1 trillion euros with some help of ECBs. If only European leaders have the will to adjust the rules a bit. It looks like they do.

Ursula Von der Leyen (VDL) under some pressure from Italy opened up to the idea of excluding defense spending from national debt limits. Germany is about to have an election on Sunday that should usher in an era of looser fiscal rules.

All that combined should amount to a significant new financial source worth at least 1 trillion euros – enough to fund a new European Army based on Macron’s formula of ‘coalition of the willing’. That should be backed by France, UK, Poland, Scandinavia, Italy, Spain and the Baltics.

So financially Europe, I am certain is going to figure this out. The bottlenecks will be in the details of how to allocate this funds to private sector and defense industries. Given Europe is going through a weak economic cycle challenges by both China and US the risk is that Europe will be divided by national economic interest and bureaucracies will once again stifle this process.

That was after all the issue with Covid recovery fund that main beneficiary countries such as Italy were not able to spend even the grants on priority areas of green energy transition because of rigid spending rules.

The toughest question remains who will commit boots on the ground for perpetuity if necessary to defend Ukraine against future attacks from Russia ? Macron did not wait long to step up to the plate and is organizing today what effectively is the first European conference of the coalition of the willing.

If he succeeds Europe will have its primordial Army – the ultimate guarantor of unity and solidarity of the continent. It will reverse the history of last 80 year when Europe some may argue was forced to accept pacificism as its foundation with US providing external security.

That era was definitely buried in the snow clad Munich of February, 2025. No more illusions. Militarism is coming back to Europe for better and for worse.

And indeed there is room both for optimism and failure. Either Europe emerges stronger, united or indeed national armies will start to compete for resources as we will return to the old pre 1941 model of each on their own.

That chapter of history is about to unfold in front of us.

Meanwhile, for its part Centenary Policy Institute (CPI) has launched a new initiative with Repsens to analyze the origin of narratives in Western Europe and Germany.

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