Template-Type: ReDIF-Paper 1.0

Title: Cold War 2.0 and Defence Readiness

Author-Name: d'Artis Kancs


Abstract: Europe is raising defence commitments under conditions of geoeconomic fragmentation, but fiscal commitments do not automatically become usable capability. This paper asks how non-kinetic geoeconomic shocks affect the capacity of European countries to convert defence resources into readiness-enabling capability. It develops a readiness-enabling index for European countries that combines four components: macroeconomic capacity, sectoral resilience, defence-industrial capability, and logistics and sustainment. The index is calculated at country level and reported through disclosure-controlled regional aggregates. It is a diagnostic measurement framework, not an estimate of classified operational readiness, combat effectiveness, military power, or causal battlefield outcomes. The results show that readiness-enabling capacity is uneven across Europe. Stronger aggregate profiles remain constrained by certified surge conversion, while countries on the eastern and south-eastern flank face more binding logistics, replenishment, air-defence, ammunition, infrastructure, and production-depth constraints. Across scenarios, losses are largest when geoeconomic fragmentation, supply-chain disruption, and reduced external support occur simultaneously. The paper contributes to defence economics by modelling readiness as an economic-industrial conversion problem under stress and by showing that binding constraints differ across countries, making uniform spending targets insufficient guides to preparedness.


Classification-JEL: F51, F52, H56, L64, O25, R11.
Keywords: defence economics, defence readiness, geoeconomic fragmentation, defence-industrial base, military logistics, supply-chain resilience, NATO burden sharing, Europe.

Creation-Date: 2026-01-05

File-URL: http://www.eeri.eu/documents/wp/EERI_RP_2026_05.pdf
File-Format: Application/pdf

Number: EERI RP 2026/05
Handle: RePEc:eei:rpaper:EERI_RP_2026_05