LONDON, March 17. /TASS/. An increase in military spending will require European countries to scale back social support programs, the Financial Times reported.

Mark Zandi, chief economist of Moody’s Analytics, said Europe had enjoyed "a peace dividend" in recent decades that "freed up economic resources for private investment and allowing governments to increase support for social welfare and financial safety nets." He said the period is over. Europe will have to respond to US President Donald Trump's demand to increase military spending to ensure the continent's own security.

According to the publication, a return to the level of military spending in the 1980s will require a change in budget policy and an increase in government borrowing. Many European countries are already facing mounting public debt. In Italy, the ratio of public debt to GDP has grown from 31% in the 1960s to 137% in 2024. In France and the UK, public debt also exceeds the size of the economy. As a result, the cost of rearmament will ultimately fall on the shoulders of taxpayers in Europe, the newspaper said.

According to the European Council, the EU countries spent about 326 billion euros, or 1.9% of GDP on defense in 2024, an increase from 214 billion euros in 2021 and an average of 150 billion euros over the 15 years to 2019. But taking into account the requirements of the United States, Europe will have to increase defense spending to 230-460 billion euros annually, according to Klaus Vistesen, an expert at the analytical center Pantheon Macroeconomics. He said an increase in defense spending may even require the introduction of a war levy in some European countries.

Also, reducing government spending on pensions and healthcare will be a particularly difficult task, as Europe is the world's oldest region. As the number of the working-age population decreases, social spending will inevitably increase, while budget revenues will decrease.

Trump previously said that the NATO countries should increase military spending to 5% of GDP. According to the US leader, Europe must bear the burden of ensuring its own security.