Investment.com – Western governments are faced with a complex act of balancing between responding to security threats and conducting citi analysts.
Like changes to President Trump for NATO allies to increase defense expenditure, the questions come to how to respond to Washer Europe.
Citi emphasized that Trump’s pressure could push European countries to 3% of GDP to expend defense, but this purpose cannot be fulfilled until 2030s.
If countries oppose these demands, it may be “true ambiguity around US security guarantee,” that Europerar may be forced to be unisiled in its defense capabilities.
In Eastern Europe and Scandinavia, countries such as Poland spend 4-5% of GDP in defense in response to responding to security concerns.
However European countries in the west, including UK and France, slowly act, according to the bank. Fiscal constraints, especially in the UK, say important obstacles.
“(The) Strategic Review Review in UK 2025 can prove to be a clear example of the UK Chancellor pressure on Exchequer under,” Citi said.
“In the middle, we think that European spending is likely to work higher (even 3% of GDP can be optimistic), so we can satisfy,” they added. “If European defense expenditure moves 3% to GDP in the middle, we expect it to add an additional ~ 30% of the sums of the entire sector.”
Finally, Citi suggested that slow action in the western Europe shows a tension between responding to russia’s risks demanded in bond markets.
As Citi placed it, “the current fiscal constraints are given … we do not expect to hear the important increase in defense.”