Who wants peace prepares for war ?

Since 2022 and Russia’s invasion of Ukraine, the world has entered a new era. The alliances between the two belligerents, the war between Israel and Hamas and threats of an extension of the conflict to the Middle East, as well as China’s predations over Taiwan, accentuate the prospects of global conflicts for which countries must prepare.

While the United States and Russia were already allocating between 3.5 and 4% of their GDP to their defense budgets in peacetime, the less armed powers are finding themselves forced to change their policies and review their trade-offs. Such is the case of France, a military power which arsenals have been depleted. This is the case for Germany, which is breaking with its pacifist ways for the first time by committing itself to meeting the NATO criterion of 2% of GDP allocated to defense. With a sharply reduced budgetary leeway, how can countries expand their military capabilities, and at whose expense? What is the social cost of rearmament? What economic opportunity does it bring ? How far should defense be pushed to the top of the agenda?

Should we switch to a very different economic policy, with short-term and long-term interest rates lower in real terms than growth, to allow for a very high public deficit without increasing the public debt ratio?