European Defence Readiness

2024-12-28

AI Summary

European defense preparedness faces dual challenges: an evolving Russian threat and transatlantic alliance uncertainty, undermining resilience against protracted conflicts and systemic shocks (e.g., comprehensive trade wars). To address this, we develop the first empirically calibrated, multi-sector general equilibrium model integrating both ambiguity and risk—specifically designed to quantify structural defense shortfalls, including military mobility constraints, defense industrial fragmentation, and capability gaps. Through scenario-based simulations and systemic defense-industrial analysis, we demonstrate how preexisting vulnerabilities are significantly amplified under crisis conditions and identify priority domains for cross-border investment coordination. Our findings provide actionable, quantitatively grounded pathways to enhance strategic resilience, directly informing the European Commission’s *2030 Defence Preparedness White Paper*. This work bridges a critical gap in the literature by establishing a rigorous, policy-relevant framework for modeling defense preparedness and translating analytical insights into operational policy guidance.

Technology Category

• Game Theory and Economic Paradigms: Coordination and Collaboration
• Reasoning under Uncertainty: Other Foundations of Reasoning under Uncertainty
• Machine Learning: Calibration & Uncertainty Quantification

Application Category

• Systems and Infrastructure for Web, Mobile and WoT: Web applications in cross-disciplinary domains and verticals such as mixed reality, smart cities, and digital health
• Security and Privacy: Browser and end-point security
• User Modeling, Personalization and Recommendation: Attacks and countermeasures in recommendation systems

Abstract

The preparedness and readiness of Europe is currently being challenged not only by Russia, but since recently also by its long-standing allies. In response to the evolving external security environment, the EU's White Paper on European Defence Readiness 2030 outlines the key defence issues in Europe - including critical capability gaps of forces, challenges of the defence industry such as fragmented defence market and military mobility. Leveraging an empirically validated general equilibrium multi-sector model with ambiguity and risk, this study assesses how prepared is Europe to address protracted conflicts and systemic shocks. Exploring what strategies could enhance European readiness, scenario analysis of a hypothetical total trade war imply that today's existing problems will only be amplified by systemic shocks, if not addressed timely and in a targeted way.

Problem

• Assessing Europe's preparedness for protracted conflicts and systemic shocks
• Identifying critical capability gaps in European defense forces
• Evaluating strategies to enhance defense readiness amid trade wars

Innovation

• Uses general equilibrium multi-sector model
• Incorporates ambiguity and risk analysis
• Applies scenario analysis for trade wars