19.10.2026

Prof. Müller authors a study for the European Parliament

Macroeconomic and Fiscal Implications of Structurally Higher Defence Spending in the European Union

European governments have embarked on a sustained increase in defence expenditure after several decades of comparatively low military budgets. This raises important questions: What are the macroeconomic effects of permanently higher defence spending? What are the consequences for public finances? And how much coordination is required to finance the build-up? The answers matter for the economic, fiscal, and political sustainability of Europe’s new security commitments.

In his report, Prof. Müller makes headway in answering these questions through an empirical analysis of historical data for the 27 EU member states covering the period from 1995 to 2025. The report was commissioned by the European Parliament’s Committee on Economic and Monetary Affairs (ECON) and is available here