Defence and security in a cold economic climate: the impact on conflict and competition

The economic crisis that swept over the western world in 2008 was heralded to be a crisis of credit, a crisis of and for those who had failed to understand that most simple lesson of home economics: that prudence demands that expenditure cannot regularly outstrip income. For many European countries – most notably Greece, Ireland, Portugal and Spain – this lesson appears to have come as something of a surprise. The economic convergence that occurred in advance of the introduction of the Euro on 1 January 2002 dramatically reduced the borrowing rates to which countries in the European periphery were subjected to. Greece, for example, saw its medium term borrowing rates reduced from 17% to 6% in the lead into the introduction of the single currency. Unfortunately we can now observe that Greece funded its entire subsequent public spending model not on real income, but on cheap credit. The problem is that as the Euro came under pressure and sentiment in the market refocused on national positions the borrowing rates soared back past the 17% mark, leaving Greece struggling to pay for even the most basic of public services. It is in those circumstances that defence finds itself placed on the frontline of cuts derived from well meaning, but often rushed austerity measures. Whilst Greece and its fellow European strugglers are relatively minor military figures in Europe (but with their own contribution to make) the contagion of excessive debt and austerity has bitten the major players including our own great nation. It is this economic driven revolution in military affairs that is the concern of this essay and how austerity is reframing competition in the international system.