From Brussels to Berlin, governments face new demands for spending on defense, energy and their aging populations
COPENHAGEN—Denmark, a founding member of NATO, has no artillery, submarines or air-defense system. The small Nordic nation didn’t think it needed them because a ground war in Europe seemed far-fetched—The conflict in its neighborhood has set it and similar European nations scrambling to plug gaps in their armory. Denmark, one of the richest nations per capita in the Western world, has pledged to boost military spending from about 1.
Denmark’s experience symbolizes how European governments are struggling to come up with ways to pay for a new era of higher costs. From Brussels to Berlin, administrations face additional demands for spending, including on defense, energy and the transition to clean fuels, as well as pressure from demographic changes that will drive up outlays on pensions and healthcare. Costly subsidies to compete with the U.S. in“We need to think outside the box,” said Danish Finance Minister Nicolai Wammen.
But such plans are getting pushback. Many European populations don’t want to see their already relatively high tax rates pumped up and resist cuts to a welfare system that will be increasingly tested as populations age and economic growth stagnates. People demonstrate in front of the Danish Parliament in Copenhagen over the decision to scrap a public holiday.In recent weeks, a move in France to raise the state pension age by two years to 64
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