More countries are vigorously developing their defense industries and calling for a shift to a “war economic model.” But what exactly is a war economy?
Last March, EU Internal Market Commissioner Thierry Breton advocated that the European defense industry shift to a wartime economy.
He said Europe was facing an “existential threat” and the European Commission announced a new defense strategy that would provide at least 1.5 billion euros ($1.6 billion) in subsidies to bolster the continent’s war machine.
Countries are also investing in their armed forces.
In Germany, weapons manufacturer Rheinmetall opened a new factory in February that will produce artillery ammunition, explosives and rockets.
Last June, aerospace and defense company Kongsberg also opened a new anti-ship and cruise missile manufacturing plant in Norway.
Data from the Stockholm International Peace Research Institute shows that military spending will reach a peak of US$2.4 trillion in 2023, the highest annual increase since 2009.
Watch the video above to learn more about the economics of war.
