It may appear reckless for Merz to expand military spending on a grand scale while the country is in economic decline, but there is more to that decision than meets the eye. Germany and other EU countries benefit from the prolonged war in Ukraine because it offers a rationale for a massive injection of borrowed cash into their economies. Market demand is not an issue for European arms makers, who are experiencing an unprecedented windfall. There is hardly any competition, thanks to no-bid government contracts. Pricing is arbitrary, and the high cost of energy and labor that is killing other sectors is more than offset by sky-high profit margins.

In other words, EU leaders are using the war in Ukraine as an excuse to apply Keynesian stimulus to increase aggregate demand, and thus to ameliorate the historic economic downturn. The formula is reminiscent of the way Hitler’s deficit financing made a massive rearmament program possible in the 1930s, eliminating unemployment. This also may explain why the leaders of the Coalition of the Willing have a powerful incentive to claim that “a militarized Russia poses a persistent threat to European security for the foreseeable future.”