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One of the outcomes of the 2014 North Atlantic Treaty Organization (NATO) Summit held in Wales was the recommendation that allies should strive towards spending at least 2% of their Gross Domestic Product (GDP) on military expenditure by 2024. This has in recent years put the debate on burden sharing within the Alliance in the limelight. Within the Alliance, the interpretation of the guidelines is different. This is partly because the U.S.A, especially under President Trump, has consistently viewed the 2-% guideline as a binding agreement. Some allies have, however, indicated that their military expenditure will not increase to the recommended threshold by the set deadline. Critics of the guideline have also identified several shortfalls associated with it and consequently dismissed it. Those who support it emphasize for instance that it contributes to addressing grievances about free riding within the Alliance. This paper contributes to this discussion and literature on demand for military expenditure by assessing how NATO's two percent guideline can be viewed from a demand for military expenditure perspective. It also proposes and estimates a dynamic panel model for this purpose. Empirical evidence presented suggests that fiscal conditions require attention in the debate on the two percent guideline. [ABSTRACT FROM AUTHOR]

The European Union (EU) promotes arms collaboration as a stepping-stone towards the evolution of an integrated European defence technology and industrial base. It will necessarily comprise prime contractors and their attendant supply chains, with the latter particularly important because they represent a refined regional division of labour, promoting efficiencies through skill-based specialisation. Paradoxically, however, Europe's largest military aerospace collaborative venture, the Eurofighter Typhoon, possesses a complex supply chain subject to political and institutional strictures, as well as potential inefficiencies. Partner nations prioritise national sovereignty objectives through duplicated assembly lines and work allocation arrangements based on juste retour (fair share) rather than market-driven competitiveness criteria. The purpose of this paper, then, is to explore Typhoon's supply chain complexity, especially the impact of juste retour policy. The findings from this analysis will highlight important policy issues influencing the future supply chain model of Europe's successor 6th-Generation fighter programme. [ABSTRACT FROM AUTHOR]

While the publication of the European Union's Strategic Compass was planned before the Russian invasion in Ukraine, the war clearly impacted its interpretation and roll-out. The strategic document requires not only that the member states increase their defence spending but that they also increase the efficiency of their spending. This special issue addresses this call for more and better defence spending in the EU from different perspectives. [ABSTRACT FROM AUTHOR]

An introduction to articles published within the issue is presented, including one on the economic impact of military spending in the European Union (EU) and another on the main determinants of military spending in each of the 15 EU countries over the period 1960-2005.

In a recent paper of this journal (Vol. 18(1), 2007, pp. 75-85)], Kollias, Mylonidis, and Paleologou (henceforth KMP) examined the relationship between the GDP growth rate (denoted as gdp) and military expenditure as a share of GDP (denoted as milex) using panel data from the 15 countries of the European Union (EU15), 1961-2000 (T=40 annual observations from each country). Given that a Common European Security and Defence Policy (CESDP) is under consideration in the EU15 group, this is an interesting paper. My comments relate to its econometrics and are organized according to the standard three stages of econometric analysis: specification, estimation, and diagnostic checking. [ABSTRACT FROM AUTHOR]

The EU and its Member States have taken unprecedented collective steps to support Ukraine militarily. That has not yet translated into a stronger momentum to further cooperation between their own defence forces, however. Ideally, Member States would integrate national capabilities into large multinational formations. NATO's New Force Model could provide an extra stimulus to that end. [ABSTRACT FROM AUTHOR]

This paper examines the impact of military spending on general government debt in the enlarged European Union (EU) countries. For this purpose, we use panel data analysis and provide estimates from a dynamic Generalized Method of Moments (GMM) panel model. The dynamics are found to be important and the results suggest that military expenditures do have a large positive impact on the share of general government debt in the EU. [ABSTRACT FROM AUTHOR]

The move towards a common European defence policy raises a multitude of multidimensional and complex issues. As pointed out in a recent paper (Hartley, 2003), these issues include economic aspects ranging from the role of the European defence industrial base to the costs of a common defence policy, and therefore the issue of burden sharing. This paper, assuming that the provision of common European defence to the participating members has the characteristics of a pure public good, approaches the burden sharing issue raised by Hartley (2003) by calculating a simple benefit share index that is then compared with the contribution made by each country to the costs of the common defence. Assuming the existence of a European Defence Union, the results indicate that some members are under-contributing while others are over-contributing in relation to the benefits derived. [ABSTRACT FROM AUTHOR]

This paper focuses on the influence of military spending on European economic growth. The estimated regressions are based on Barro's (1991) growth model, which controls for economic institutional variation across countries. The cross-section and panel data analyses cover the period 1960-2000. The empirical findings indicate that military spending has an overall net negative influence on economic growth. Furthermore, the magnitude of this negative impact tends to increase over time, as cross-section regression results indicate. Given the development of a Common European Security and Defence Policy (CESDP), these findings suggest that enhanced defence spending may hinder European economic growth. [ABSTRACT FROM AUTHOR]

This paper examines the peace dividend effect of Turkish convergence to EU membership. By employing a multi-region dynamic CGE model, we examine the prospect for conflict resolution if Turkey becomes an EU member. The model allows us to analyse several scenarios that imply varying amounts of reduction of the military expenditure/GDP ratios. On the one hand, this change will cause a decrease in sectoral demand for military expenditures, while on the other hand, reallocation of the reduced expenditure on (i) education, (ii) tax decrease, and (iii) infrastructure, should have a huge growth impact. Our dynamic CGE simulation experiments emphasize the economic gain for all parties involved. [ABSTRACT FROM AUTHOR]

In recent years, there has been a growing number of studies that investigate the economic effects of military spending using a variety of estimation methods and focusing either on individual countries or on groups of relatively homogeneous countries. The situation is not the same as far as the demand for military expenditure is concerned, where less attention has been given and the majority of empirical studies have focused on individual countries, with only a few focusing on groups of countries and employing cross-sectional or panel data approaches. A region that has not attracted any research interest regarding the determinants of military expenditure is the European Union (EU) with the exception of individual country studies (mainly for the UK, Greece, France, Spain, Portugal). This paper argues that understanding the determinants of military spending in these countries is very important, especially given the discussions in recent years towards the development of a Common European Security and Defence Policy (CESDP). It then follows Dunne et al. (2003) and employs the Autoregressive Distributed Lag (ARDL) approach to cointegration to estimate a general model of aggregate defence spending for each of the 15 core EU countries over the period 1961-2005. The findings indicate that there is very little uniformity in the factors that determine each country's demand for military expenditure, something that needs to be borne in mind by policy makers when burden-sharing issues are considered in the development of the CESDP. [ABSTRACT FROM AUTHOR]

The nexus between economic growth and military expenditure has attracted considerable attention and has been the subject of extensive theoretical and empirical work. Given the move towards the development of a Common European Security and Defence Policy (CESDP), this paper, using panel data analysis, addresses the causal ordering issue between growth and defence spending in the case of the European Union (EU15). Results reported herein suggest the presence of a positive feedback between growth and military expenditure in the long run and a positive impact of the latter on growth in the short run. [ABSTRACT FROM AUTHOR]

By European Union and NATO standards, Greece consistently allocates substantial human and material resources to defence. The Greek defence burden (i.e. military expenditure as a share of GDP) has invariably been appreciably higher than the EU and NATO averages. The paper applies an autoregressive distributed lag model (ARDL) to present cointegrated estimates of the demand function for Greek military expenditure, in which domestic political factors and external security determinants are incorporated. Our empirical findings suggest that Greek defence spending over the period 1960-1998 has been influenced by both external security concerns, namely Turkey, as well as changes in the domestic political scene. [ABSTRACT FROM AUTHOR]

From 2011, due to war, conflict, and ensuing unrest, both in the Middle East and Africa, the European Union's southern external borders were confronted with an influx of migrants and refugees. At its height, the influx became known as a migration (or refugee) crisis and the European Border and Coast Guard Agency (FRONTEX) was perceived as a pivotal partner in crisis management at the borders. FRONTEX does not avail of its own operators nor materiel, and, consequently, Schengen member states and Schengen Associated Countries were requested to contribute personnel and equipment for operations. From 2012 to 2018, this article analyzes the member states' burden-sharing behavior regarding their contributions to European Border Guard Teams and Technical Equipment Pool. Our findings include both over- and under-contributors. As the sum total of contributions over all member states is high, it could be concluded, member states derive common benefits from border management. However, results also show that, as compared to others, member states situated at the European Union's Southern and Eastern borders, on average, are over-contributing. Moreover, contributions from individual member states fluctuate over time. Apparently, the acquired benefits are not always perceived in the same way. [ABSTRACT FROM AUTHOR]

This article maps notions of (in)security and security policy within the European Union (EU) since the 1990s using the cases of terrorism and organised crime. It traces interpretations of European policy-makers about the sources and costs that these two human-induced insecurities incur on Europe's societies and identifies the rationalities underlying the respective perceptions and policy actions. The analysis reveals that there are different logics at work that guide the economics of security: path dependency, reactive logics, emotions, integration dynamics and institutional interests, external pressures and more recently also considerations about the potential effects on the European economy. However, the EU's attempts to model cost scenarios still remain underdeveloped. [ABSTRACT FROM AUTHOR]

The enlargement of the EU has implications for the national defence requirements and therefore national defence policy of European nations. In light of the freedom of movement of citizens between member states it is appropriate to consider the implications of a country's military expenditure for its macroeconomy and specifically on the flows of migration between member states. Traditionally, income differentials, employment levels and relative standards of living are all factors that influence an individual's decision to migrate. To this list we add the level of military expenditure. Migration from a panel of 16 Central and Eastern European Countries (CEECs) to Germany between 1995 and 2002 is found to be the result of the level of military expenditure of the source country and the host country in conjunction with factors consistent with standard theoretical predictions. [ABSTRACT FROM AUTHOR]

Presents an explanation for the fall of the European Union (EU) defense budgets. Percentage of military expenditures in the gross domestic product of several European countries; Discussion of the political, military and industrial integration of the EU; Model of defense production with spilling effects; Impact of strengthened political integration on the domestic defense production of the European countries.