European Defence from the Perspective of Fiscal Federalism – A Case for Military Integration?

Abstract

The integration of EU Member States’ militaries has come to the forefront of political discussions in recent years, especially since the Russian invasion of Ukraine on February 24^th, 2022. This paper employs the theoretical lens of fiscal federalism to clarify and weigh the arguments for and against military integration in Europe. Centralised provision of deterrence would overcome many of the inefficiencies of European deterrence production, but Member States’ diverging preferences for security production incentivise against integration. The paper finds nonetheless that interjurisdictional spill-over effects of military integration indicate that EU defence would be organised the most efficiently and with fair burden-sharing at the EU level. Such a development is nonetheless unlikely in the context of the current divergence of preferences among the Member States and a renewed focus on NATO.