G-7’s $10 Trillion Defense Spending Task to Reshape EU Budgets

Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.

It’s a $10 trillion challenge facing the EU and its allies over the next decade — the vast increase in defense spending required to counterbalance the militaries of Russia and China. Analysis from Bloomberg Economics shows how the increasing burden of preparing for war will create a new fiscal paradigm for most NATO members. Just meeting the alliance’s 2% of annual GDP defense spending target would stall much of the EU’s post-pandemic debt consolidation, while getting to 4% could give some countries painful choices. It’s back on leaders’ agendas next week in Brussels, where they’ll be advised to increase defense purchases from EU-based companies.