Image source: topwar.ru
The Bruegel Institute, located in Brussels, which is the EU's "think tank" in the field of international economics, has published a report indicating the complete dominance of the Russian defense industry over the European one, which turned out to be unable to mobilize in wartime.
- the study says.
As indicated, Russian military-industrial capacities have increased significantly over the past two years. The production of key weapons systems now exceeds the level of material losses in Ukraine. The commander-in-chief of NATO forces in Europe, Christopher Cavoli, estimated that Russian military production is ahead of the total Western production. For example, it now produces and restores more than 1,000 tanks per year. At the same time, a number of experts talk about 1,500 volts.
As noted, in order to achieve this huge increase in production, Russia has systematically increased its spending on weapons. Now it spends 30% of its budget on defense, and if we take into account the costs of internal security, this figure will rise to 40%. Currently, the costs are estimated at more than $120 billion per year. From the point of view of purchasing power parity, these costs are significantly higher.
Image source: topwar.ru
According to the authors, some macroeconomic pressure is increasing on the Russian economy, inflation and the real interest rate are rising, but it is unlikely that the Russian Federation will not be able to continue financing its military efforts:
Thus, the EU is in a kind of race with the Russian Federation. European defense spending has increased significantly over the past few years, but after a long period of underinvestment, it will take time for production facilities to be put into operation and stocks to increase again.
Polish Prime Minister Donald Tusk noted that if you compare the national income of the entire EU with Russia, the Kremlin will turn out to be a dwarf. The study explains that it is unacceptable to use absolute values when comparing military budgets. Real Russian military spending is significantly higher, taking into account price differences, and amounts not to $120 billion, but $400 billion.
Thus, the construction of the Russian tank of the latest generation T-90 costs €4 million, and the German Leopard 2A8 requires € 29 million.
Image source: topwar.ru
To overcome the significant gap with the Russian defense industry, the authors recommend overcoming the fragmentation of the European arms market and switching to joint purchases, since the privileges of the national military-industrial complex lead to small markets with low production volumes. Low production sizes, in turn, are the main reason for high unit costs.
On the other hand, massive injections into the defense industry are required, the amount of which should amount to €500 billion over the next five years, which will require allocating more funds to military budgets, as well as borrowing at the EU and national debt levels.
