Hey everybody, Peter Zion here coming to you from Colorado. Today we’re doing a video. That’s a reminder that it’s not just elections in the United States that matter this year. We just had elections for the European Commission president. And I know, I know, I know, you’re like really the election of the chief bureaucrat in Europe. That’s what we’re going to talk about the dividend matters. You’re also the vandal Aaron, is a former defense minister of Germany, who was elected to be the President of the Commission. A few years ago, she’s now been re elected with a fairly strong majority, I would argue she’s done a decent job overall, considering that she’s been presided over the European Union during the entirety of the Korean War, and has emerged as a bit of a hawk on most policies. The leader of the European Commission is basically responsible for two things. Number one is managing the bureaucracy that is in the European Union, which is very small by European standards. But technically, it has legal authority over most of what happens in Europe.
Second, to basically serve as a crisis mediator among the various European countries, there are a lot of issues in Europe that require unanimity. And when you got countries as small as Malta, and as large as Germany, all having a functionally one vote, it requires a lot of proactive work on the part of the executive. Other issues in Europe are decided by something called qualified majority voting in which it’s kind of a hybrid voting structure, where states based on their population size and their economic strength have more to say than others. It’s still favors the small states a little bit like American electoral college, but it’s a lot more nuanced. And of course, it’s done European style. So it’s more complicated than it needs to be. And someone has to ride herd over all of that. And that is underlying this job, and now will be for another few years. The reason I wanted to shortlist this topic specifically, though, is in her final pitch. Before the vote happened, she indicated what her
priorities were going to be. And you know, a lot of it is the normal stuff, green New Deal, cyber defense, all that good stuff. But one that really stuck out, both to me and to the members of parliament, was her assertion that the EU now needed to create a common air defense space. Now, there are two institutions that have dominated Europe for the last 75 years. The first is the European Union itself in its various forms, starting with the Coal and Steel Community, turning the European community now the European Union, at its job has pretty much always been economic integration, the creation of a common trading bloc, the creation of a common market, eventually getting into banking, and financial regulation, all that good stuff. And in that the European Union, in my opinion, has actually done a lot better than I thought it was going to do 25 years ago, that doesn’t mean that there aren’t problems. Oh, my God, there are so many problems, there’s so much drama, but it’s still there. And it’s still kicking. And they’ve been making more than incremental progress, especially since the financial crisis of the mid aughts. So, you know, give credit where it’s due. The second big institution is NATO, which has always been an American dominated or failing to be really kind American British dominated. And it’s responsible for defense issues, primarily, but not exclusively, versus the Soviet Union. And now the Russians. Now NATO was kind of on its back foot and the arts in the teens, when most Europeans didn’t see any security problems anywhere. Even with the Russian invasion of Ukraine, dating back to 2014. A lot of Europeans, the Germans, most notably, just tried to pretend that didn’t happen. And so NATO was fading. Because the Americans were getting frustrated, the Europeans weren’t taking European security seriously. And the Europeans didn’t think security was an issue at all. In fact, we got to a point just before the Ukraine War, where the Germans were actually openly publicly talking about dismantling their military completely, which would have been, you know, monumentally stupid. But anyway, of underlyings discussion of an air defense space is really interesting. It’s not that that’s not necessary. It’s not that it’s not needed. The Europeans are looking at the Ukraine war, they’re getting a little pale. They realize that their system has much more integrated. It’s much more dependent on energy and electricity than anything goes on Ukraine, I mean, Ukraine, I don’t want to call it a failed state or anything like that. But on the technological scale, the industrial development scale, it is significantly below anyone in Europe. And so the Europeans know that if the sort of attacks that the Russians are doing daily against Ukrainian infrastructure were to happen somewhere else in Europe, the impact would be an order of magnitude bigger. There’s just so many more and more important things in Europe that run on electricity than what you have in Ukraine that the damage would be immense. And an air defense system and missile defense system is really the only way to make that happen. And if you have a Polish, a Slovak, a Latvian and a Romanian system,
that’s great. But what you really need is integration especially with things like radars. And since missiles you know, they’re launched from the point that their launch to the
point that they hit. If it’s a few 100 kilometers away, you’re talking about, you know, single digits of minutes. Reaction Time is really important. And that has to be all set up ahead of time.
What really stuck out in my mind, though, is that she wants this to be an EU prerogative. And until now, we’ve only had a few little, let’s just call them temper tantrums. That’s what they were when a few countries decided they didn’t like what the United States was doing with its military. So they wanted to form a European answer to NATO.
The problem is that the resources were never there. And anything that you dedicate to a NATO project is automatically not available to be dedicated to an EU project. Well, with the Russians basically, launching a genocidal war next door. That is a combination of forward scorched earth and kidnapping and sexual assault, the Europeans have found themselves motivated to massively expand their defense spending. So not only is this likely to help NATO quite a bit, there actually could be the resources necessarily, for the European Union to do something in defense on its own.
Whether it’s enough, is an open question, which means that this is going to go one of two directions, either number one, the Europeans are going to massively expand the defense spending and the worse Ukraine does in the war, the greater the push for that is going to be in order to build kind of a parallel capacity. Or number two, the European Union is going to sign a series of agreements with NATO, that basically merge the two from a certain point of view. Now, most of the countries that are in the European Union are also in NATO, and vice versa. And the the holdouts are countries like the United Kingdom, who isn’t going to leave NATO. But it’s a pretty strong position on European defense. The sticklers are going to be the four countries that are members of the EU, but are not a member of the military alliance.
One of these Malta doesn’t have a security concern, aside from illegal migration for Africa, so we can put that one to the side. Another one is Ireland who kind of has a Canadian approach to defense or like, by the time anything gets to us, the world’s already ended. So we’re just going to freeride on this shoe, the Irish hate mail, I’m sure we’ll get that here in no time. But the other two matter a little bit more. One is Austria, which has been a neutral country, because everyone wants it to be neutral. The last time the Austrians started getting this security policy, we got Hitler. So you know,
the more they simmer down, the better, they’ve got a good relationship with NATO, that’ll probably mean that they can just abstain on everything and let it sail through. And then the last country that matters is Cyprus, which you know, has very little to do with the Ukraine war. But if you’re going to have a European Defense Network, the idea is it’s going to protect against countries that are not in the European Union. And while everyone’s eyes right now are on Russia, and that’s the whole thing of underlines trying to get people agitated about Cyprus is primary security concern is Turkey. And so you have this one country that has under a million people who has deep abiding cultural military conflicts with a major trading partner, the EU, Turkey, but probably is going to have veto power over all of this. So even if funder lane is able to get the Europeans to come up with the money, even if they can figure out a format in Europe that allows NATO in the European Union do this to do this side by side, we have one hell of a fly in the ointment here, as regards the Cypriots. How will that be sorted out Gods nose? Keep in mind that the last time Cyprus really made the news from a global point of view. It was in the financial crisis of the late aughts. And in that time, we had had huge bailouts. For Italy, for Spain for Hungary for Greece. There was one for Cyprus two, it was the smallest of all of them, because Cyprus is a money laundering center, it became very quickly the most controversial, the most complicated of all of them, and we’re gonna see something like that in defense as well. So stay tuned.