Europe’s new “security‑first” agenda is usually presented as a direct response to Russian aggression. That story is emotionally powerful and politically convenient, but it hides a deeper shift. Europe is redirecting its limited borrowing capacity away from an already faltering green transition and toward the military sector, where state-guaranteed demand compensates for eroding competitiveness. This is not merely a change in priorities. Rather, it reads as a desperate response to a deeper structural problem that no policymaker is willing to confront: contemporary capitalism can no longer rely on mass productive employment as the basis of its own reproduction. Technological advances from microelectronics to AI have steadily reduced the role of human labour in commodity production, deepening a widening gap between soaring financial claims (bubbles) and a fragile social reality that struggles to keep pace.

This gap is not resolved but managed with the same medicine that created it: financialization, credit expansion, state intervention, and now permanent spending for warfare. In this light, it is no surprise that, in 2022, the transition from the “war on Covid” (hyped as the Third World War) to the spectre of Russian invasion of Europe (beyond the borders of Ukraine) was seamless. One emergency simply replaced another, without a break in political logic or economic governance. What mattered was not the nature of the threat but its function: legitimising extraordinary money printing to save the financial markets in the short term. The EU’s recent €90 billion loan package for Ukraine’s military needs merely extends this logic, translating a carefully cultivated and actively prolonged geopolitical urgency into yet another vehicle for debt issuance and emergency finance.

The European Green Deal was an attempt to channel this rationale into a morally irresistible economic project. It was less about the climate than a leveraged financial strategy sold as industrial opportunity. Through NextGenerationEU and EU Green Bonds, Brussels sought to mobilise public borrowing to crowd in private ESG capital (Environmental, Social, and Governance, a framework used to evaluate a company’s “ethical impact”), modernise industry and restore competitiveness through decarbonisation. Automotive manufacturing, batteries, clean mobility, and renewables formed the backbone of this wager.

Irrespective of its actual feasibility, that wager is now under severe strain. Nowhere is this clearer than in the automotive sector, long the pillar of Europe’s industrial economy. Predictably, European carmakers have struggled in the transition to electric vehicles because of costs and structural disadvantage. Chinese manufacturers benefit not only from huge state support but especially from near-dominance over critical minerals. As a result, Chinese EVs enter European markets at price points European firms cannot match, often with superior technology. This matters because the Green Deal was financed on the assumption that European firms would occupy top segments of the green transition. Once that assumption weakened, “capital discipline” reasserted itself. Private investors grew cautious, and green investment began to resemble a liability rather than a growth engine – especially in an environment of higher interest rates.

At this point, the language of security moved to centre stage, replacing ecological “green” with its military counterpart – from electric cars to armoured tanks. Defence spending offers what green industrial policy increasingly cannot: guaranteed demand, insulation from global competition, and a renewed moral narrative that renders cost objections politically illegitimate. Unlike EVs, European weapons systems face no Chinese competitors, since success is not measured in market returns but in deterrence. Crucially, this makes the military sector – as demonstrated by the two World Wars of the 20th century – uniquely compatible with debt and a political economy of depletion.

Here it is important to return to the problem of economic reproduction. Military spending absorbs capital without expanding society’s productive capacity. Weapons, particularly in the nuclear era, do not sustain the real economy; they destroy or threaten destruction. Precisely because military production is largely insulated from tests of market profitability, it serves as an ideal conduit for debt-financed expenditure. Rearmament loosens credit conditions and legitimises monetary expansion, benefiting above all the financial sector. It thus operates as a paradigmatic form of “faux accumulation”: money is set in motion without generating new value, extending instead the lifespan of an imploding system whose centre of gravity has long moved away from productive labour.

In Europe, environmental ambition and geopolitical urgency are framed as sovereign political choices, but in truth they are outcomes shaped by the availability of capital – how much of it can be borrowed, at what cost, and where it can be deployed without undermining investor confidence. In the shift from climate to security policy, the Green Deal has been demoted rather than abandoned: climate ambition survives rhetorically, while geopolitical threat management becomes the organising principle that authorises leverage and reallocates capital. Thus ESG, often presented as a moral compass, reveals its real function as a capital-routing mechanism: when green investment appeared profitable, it was enforced; when it became risky, it adapted. Defence was reclassified from “mortal sin” to “strategic necessity”, and the war drums began to beat again.

It is worth noting that Europe’s move toward a military‑industrial model deepens rather than overcomes its subordination to the United States. Lacking the industrial scale, technological autonomy, and monetary power that once underpinned the American system, the EU mimics it under conditions of structural decay. Its transatlantic dependence is magnified by the fragility of the US‑centred financial order: Washington has been struggling to rollover an ever‑expanding public debt now exceeding $38 trillion, while a new phase of highly inflationary Quantitative Easing is already underway. The ticking time-bomb here are the increasingly unloved US Treasuries (debt certificates), the mainstay of global finance, anchoring banks, pension funds, collateral markets, and liquidity worldwide.

Europe’s rearmament thus unfolds within a dollar‑centric, debt-soaked architecture whose volatility it neither controls nor is willing to escape. Europe, in other words, has chosen a path of self-inflicted economic decline, accelerated by its abandoning cheap Russian energy and the strategic depth of Eurasia. By uncritically aligning with US policy on Ukraine in 2022, it embraced militarization, the economic costs of which falls disproportionately on the middle and lower classes. The war in Ukraine not only ensured that the EU slashed its imports of Russian gas and oil – an old priority of the United States – but also allowed the EU’s debt capacity to be mobilised for rearmament rather than for deep decarbonisation.

The uncomfortable conclusion is that the Green Deal seemed politically viable as long as it aligned with competitiveness. Rearmament now fits the logic of crisis capitalism more convincingly – and may well have been its inevitable outcome all along. The overarching point is that the system blindly follows its own imperatives while it continues to destroy its substance: a labour-based society hollowed out by technological displacement, governed through permanent emergency, and increasingly illiberal. Seen in this light, the US shock-intervention in Venezuela of January 3rd betrays a structural concern that is deeper than one might think, and not limited to plundering the country’s energy resources (outrageous as that alone already is). Trump’s recent call to raise military spending from roughly $900B to $1.5T is fully in keeping with this Western trajectory of rearmament and deepening militarisation, representing a fiscal jolt of rare scale – one that will be financed through yet another round of emergency-driven borrowing. The most likely result? Heavier Treasury issuance, mounting pressure on yields, and an even deeper dependence on Fed-enabled liquidity support, underscoring how thoroughly the US “growth model” now rests on debt-fuelled expansion.

So it should be clear that what EU leaders describe as an imminent “hybrid war” names not an exception but a generalised and enduring condition of financialised capitalism – a standing regime of debt mobilisation that prepares populations for conflict while normalising austerity and surveillance. “Security first” is not a strategic awakening but the rhetoric of decline itself, the language through which blind systemic self-preservation slides into self-destruction.

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