A Warm Bath With Gunpowder In It: How Europe Is Rewriting the Welfare State Into a War Budget Author: Дністер Published: 2026-06-06T03:02:09.000Z Language: en URL: https://neurodrift.org/en/blog/tepla-vanna-z-porokhom/ Original (Ukrainian): https://neurodrift.org/blog/tepla-vanna-z-porokhom/ Tags: war, Europe, defence, budget, welfare-state, NATO Original source: https://neurodrift.org/blog/tepla-vanna-z-porokhom/ In 2024 the EU's welfare bath weighed €4.925 trillion — 27.3% of GDP, almost 13× its defence. Now a war meter has been lowered into the water, and it's already ticking. ----- Late summer, 2025. Unterlüss, Lower Saxony. A Rheinmetall plant that, by 2027, is meant to turn out up to 350,000 155-millimetre shells a year. Clean hard hats, industrial light, politicians with level smiles, a CEO cutting the ribbon. Everything in frame gleams as if war had finally been brought into compliance with an ISO standard — quality protocol, plaque by the door, a coffee station for guests. The cameras film the factory opening. The cameras do not film one single shot: the moment where someone pays for it. The factory was opened in public, with a band and a buffet. The bill — as always in Europe — was hidden inside a 270-page PDF, so that democracy wouldn't take fright at its own invoice. This is not a report about a defence plant. This conveyor belt is physical evidence of something that has just ended in Europe. Not peace — there has been no peace in Ukraine for four years now, and Europe knows it. Something more intimate has ended: the warm bath the continent has lain in for thirty years, convinced that security is a background function, like hot water in a hotel. Press the button and it comes. It doesn't come, you file a complaint at the front desk. The problem is that since 2022 the front desk has started answering with artillery. A heated indoor sea The number first, because without it the rest of this piece is just a mood. In 2024, social spending in the EU — pensions, healthcare, benefits, insurance — came to €4.925 trillion. That is 27.3% of the entire Union's GDP. For comparison: EU defence spending in 2025 was around €381 billion, 2.1% of GDP. Which means the welfare state is still bigger than defence by almost thirteen times. This isn't a bath. It's a heated indoor sea. And for thirty years it warmed itself — on cheap gas, low rates, long procedures, and an American umbrella that Europe paid for in gratitude instead of money. Now a military meter has been lowered into that sea, and it's already clicking. Europe's warm bath didn't end — it was simply plumbed into the war budget: now security reaches the water through debt, pensions, rent, and a redrawn map of work. Here it matters not to slide into the usual genre of "Europe finally wakes up." That's a press release in body armour, and it lies twice: applause where sobriety is owed, and "finally" where the truth is "four years later than the alarm rang." I'll propose a different lens. Let's name it: the Warm Bath. Not a meme but an operating system — the state in which a society sincerely believes that an existential threat is a service error, to be cleared by someone in uniform, preferably behind a wall, preferably for free. Recall Jonathan Glazer's The Zone of Interest. The commandant's family lives in a tidy house with a garden: the children play, the mother debates a dress, the gardener prunes roses. On the other side of the wall is Auschwitz, and its industrial drone is audible in every frame, but the camera never turns toward it. The film says one terrible thing: comfort can exist not after the catastrophe but flush against it — if the architecture is neat enough and the wall is high enough. European comfort was not a crime. But it learned to speak so quietly that it sometimes couldn't hear history working on the far side of the wall. That wall used to be called "the eastern flank." Today it is called "Ukraine." The peace dividend: a narcotic with a nice label After the Cold War, Europe made a calculation that seemed brilliant at the time. The threat had vanished — so the money that went on armour could go on living instead. Economists call it the "peace dividend." The Ifo Institute puts it without euphemism: governments "collected the peace dividend," cutting defence in favour of consumption. The figures: since the end of the Cold War, social spending in Europe rose 2.4-fold, while GDP rose only 1.9-fold. Comfort grew faster than the very economy feeding it. Someone else made up the difference. Picture a scene from the early 1990s. A German politician ceremonially takes off his helmet, lays it under glass in a museum, and beside it opens a new social programme. Everyone applauds. The helmet lies quiet. It doesn't take revenge for thirty years — it simply waits and runs up a storage fee. In 2022 it comes back, and it turns out the left-luggage locker was never free. Europe didn't abolish war. It outsourced it — preferably to America, preferably with no subscription fee. And then spent thirty years puzzled as to why the supplier kept getting nervous. And here comes the first important caveat, because without it the text slides into op-ed posturing. The welfare state should not be mocked. It is one of the great civilisational victories in history: old age no longer equals hunger, illness no longer equals bankruptcy, unemployment no longer equals social death. The warm bath didn't make the European weak. It did something worse: it convinced him that boiling water in the world is a service glitch rather than a normal state of matter. In WALL-E, the people aboard the Axiom recline in chairs, drink their meals through a straw, and stare at a screen half a metre from their faces. They're not in pain. They feel fine. It's just that their bodies no longer hold a shape fit for reality. The warm bath doesn't drown you. Sometimes it just makes your legs decorative — and you only notice it the moment you have to stand up and run. The peace dividend in practice: the water wasn't stolen — it was quietly drained, while some still pretend it's warm. The official merely opened the valve a little wider and entered a number into the ledger. The duck in the helmet is already being carried by the current toward the cold pipes — and it doesn't know it yet. The ladder: how the bath heats up, cools down, and demands steel again To keep the cycle from being mistaken for the end of the world, it helps to see the whole ladder at once. Europe has walked this route before — it's just that every generation believes its own stretch is unique. CycleThe operating illusionWhat was actually happeningThe domestic scene 1945–1989"Security is expensive — and everyone knows it"Cold War disciplineBomb cellar, siren, service, factory 1991–2014"History became a management task"Peace dividendBath, insurance, cheap mortgage 2014–2022"Crimea — an unpleasant push notification"A signal that force was backEurope taps "remind me later" 2022–2026"War is back — in the budget"ReArm Europe, NATO 5%, RheinmetallPDFs, bonds, tenders, shells 2026–2035"A hybrid of welfare and security"A welfare state with an armoured annexA pension committee next to a drone procurement 2014 is the most shameful line on this ladder. The annexation of Crimea arrived as a push notification, and Europe did what every one of us does at three in the morning: it hit "remind me later" and rolled over. Eight years of snooze. The alarm rang every hour — Donbas, MH17, Syria, Salisbury — and every time Europe found the snooze button. European history did not return in 2022. It simply stopped being a free trial period you could extend indefinitely. Guns through butter: why the butter showed up with a QR code Now the central thesis, and it's easy to ruin with cheapness. The temptation is to frame it all as "defence versus welfare," guns versus butter. That's Soviet-poster-level thinking, only without the poster and with a worse spreadsheet. Reality is more complicated and more interesting. Europe is not swapping the welfare state for an army. It is building an army into the welfare state — through debt, public procurement, dual-use research, pension reform, infrastructure, energy and cyber security, industrial policy. Not "guns instead of butter." Guns through butter. Look at how NATO's new target is built. At the Hague summit on June 25, 2025, the allies agreed on 5% of GDP by 2035 — but it isn't all tanks. It's 3.5% on "core defence" plus 1.5% on broader security: critical infrastructure, networks, resilience, cyber-defence, the defence-industrial base. To get there, total NATO spending would have to rise by roughly $912 billion — to $2.36 trillion a year over the decade. In parallel, the European Commission rolled out the ReArm Europe / Readiness 2030 plan, capable of unlocking up to €800 billion, and the Council adopted the SAFE mechanism — €150 billion in joint defence loans. The old question was "guns or butter." The new question is "why did the butter suddenly arrive with a defence-procurement QR code — and who's paying for delivery." That's why this is not a budget line but a generational bet. 2035 is the horizon on which today's student becomes a taxpayer and today's taxpayer becomes a pensioner. The bill is written for one cohort and paid by another. What follows is four channels, one at a time, because that's exactly how geopolitics enters your life: not through the news, but through your debt, your pension, your rent, and the first line of your CV. Channel one. Debt: a shell in your rent In March 2025, German Chancellor Merz announced a loosening of the "debt brake" for the sake of defence — and the bond market reacted instantly. The yield on the 10-year Bund jumped 34 basis points in a month, to 2.73% — the largest such move in a decade. As of late May 2026 it holds around 2.95%. It sounds like a line scrolling across a Bloomberg terminal, and that dullness is exactly the point. Recall Margin Call. The night office of an investment bank; a young analyst finishes a model and realises the whole portfolio is a corpse in a suit. The seniors gather in the glass room. No one shouts. In finance the most terrifying things are said very quietly. Europe right now is not in an apocalypse. Europe is in a night meeting, where the spreadsheet has finally stopped being polite. Because the Bund is the base rate from which the price of everything is reckoned: mortgages, rents, corporate loans from Lisbon to Helsinki. A trader sees "+34 bps." A few months later, a person in Madrid sees a more expensive mortgage offer. Between those two frames there is no dramatic montage — only a very boring transmission channel, where history wears an accountant's glasses. A shell may be flying toward Pokrovsk, but its shadow sometimes falls on a mortgage offer in Madrid. Geopolitics rarely knocks on the door — it comes in through the housing bill, because that's where the security is weakest. Channel two. Pensions: the bill goes to whoever can't yet write a complaint The new contract is clearest under Germany's X-ray, because there both giants stand side by side. In the 2026 budget, defence is around €83 billion plus €25.5 billion from the special Bundeswehr fund; military aid to Ukraine is €11.5 billion. And even so, social spending still holds around 38% of federal expenditure. Welfare hasn't gone anywhere — a new armoured housemate has simply moved in beside it, and now the two share one kitchen and one fridge. And now the most delicate spot. The federal subsidy to the pension insurance system in the 2026 budget is €127.8 billion. That is 33.3% of all tax revenue. Every third euro collected goes to keeping a promise made to the previous generation. And it's precisely from here, from this overloaded channel, that room for defence will have to be found. Picture a pension committee. A long table, glasses of water, fat folders, disciplined silence. One participant is missing from the room — the 25-year-old German of the year 2040, on whom this very meeting will draw the bill. That's very convenient: when the victim has no calendar right to outrage yet, it's easier to call her "long-term sustainability" and enter her into the minutes without objection. Here it is, the mechanism without the satire: the warm welfare bath drains on the left, the calm official in the centre opens the valve, the meter spins into the red — and the heat flows into the armoury. The duck is no longer floating: it's sitting on a shell crate, in its helmet, fully mobilised. Pension reform is when the state asks a future citizen to pay for the war while he still hasn't learned how to write a complaint. The most convenient victim is the one who's in kindergarten today. Channel three. Rheinmetall as the university for the class of 2035 Money rewrites not only budgets — it rewrites careers. Back to Unterlüss. The plant is ramping on schedule: 25,000 shells in 2025, 140,000 in 2026, up to 350,000 in 2027. And SAFE and ReArm Europe lay a long order horizon beneath all of it — not a quarter, but a decade. A decade of guaranteed contracts is a talent magnet stronger than any ideology. If in the 2010s a gifted engineer dreamed of Tesla, DeepMind, or Spotify, then in the 2030s his first serious offer may well come from Helsing, Rheinmetall, Saab, Kongsberg, KNDS, or PGZ — or from a dual-use robotics start-up that doesn't have a name yet. Not because he's turned militarist. Because the queue for defence contracts is now longer than the queue at a Kreuzberg barbershop, and you don't pay your mortgage in manifestos. Your child won't necessarily become a soldier — Europe is humane. It will simply arrange for the first offer in her LinkedIn to come from a company that optimises shrapnel trajectories. And they'll even call it good engineering work. Channel four, and here Europe should fall silent and watch: Ukraine Because while Brussels negotiates the frameworks, something has been running in Ukraine for three years now that no European budget can buy with money — a forced university of adaptation. Numbers worth reading slowly. According to Reuters, in 2025 Ukraine planned to buy around 4.5 million FPV drones — after more than 1.5 million the year before; 96% of them produced domestically. By the official estimate of the National Security and Defence Council (RNBO), Ukrainian industry's capacity as of 2026 allows for the production of more than 8 million FPV drones a year (this is a state claim, and it should be presented exactly as an official estimate, not as a neutrally proven fact). In May 2025, a Magura naval drone shot down a Russian Su-30 with an air-to-air missile — by the assessment of CSIS, the first case in history of a surface drone destroying a combat aircraft; within twenty-four hours a second was downed. The European navy was still reading the doctrine while a Ukrainian sea drone had already signed its review on the hull of a fighter jet. And the main thing — Ukraine is no longer "the petitioner." SAFE explicitly allows the Ukrainian defence sector to be associated from the very start. EU4UA / Brave1 launched a €3.3 million grant programme for high-speed interceptor drones and radars. Ukraine is becoming not a recipient of aid but an R&D node of European defence. Step, in your mind, into a Ukrainian drone workshop. A soldering iron, a battery, a Chinese component, the scorched casing of the previous version, a Telegram message from a unit: "after the last electronic-warfare jamming we need a different frequency." No innovation theatre. No beanbags, no corporate "future of warfare" workshop, no facilitator with a marker. Just a person re-soldering death into the next version of the product — because the previous version didn't survive Tuesday. In Europe, defence innovation often begins with a committee. In Ukraine, it begins with the previous version not surviving Tuesday. That is what "constraint as accelerant" looks like: less resource, zero right to error, a front-line feedback loop faster than any procurement cycle. Ukraine became a flagship not because it had more money — it had less right to error. Resource constraint plus constant pressure plus a feedback loop from the front equals adaptation faster than any peacetime bureaucracy. This is knowledge Europe has not yet learned to pay for honestly. It still thinks Ukraine is selling suffering. Ukraine is not selling suffering. Ukraine is producing adaptation knowledge — and issuing an invoice that Europe, for now, pretends it never received. A working group, to agree on the urgency And now about the slowness — and this is no longer satire for satire's sake, this is about the survival of the bath itself. Picture a Brussels meeting room. On the screen: "urgent defence readiness." Everyone agrees that everything is urgent. Then they form a working group to agree on exactly how urgent everything is, and to harmonise the urgency across twenty-seven agendas. European bureaucracy doesn't slow the war down. It simply asks the war to file its paperwork in triplicate, ideally by a deadline that is still under discussion. Now hold a clock up to this — not mine, but their own. Europe's intelligence services named the date themselves. BND chief Bruno Kahl and Germany's defence minister Boris Pistorius warn that Russia may be ready to test NATO's resolve — most likely not with a full-scale invasion but with a limited operation along the lines of "protecting Russian speakers" in the Baltics — by around 2029. The Bundeswehr's first-ever military strategy sets that very year, 2029, as the threshold of "kriegstüchtig" — fitness for a major war — and explicitly names Russia "the greatest and most immediate threat." And now look at what Europe is meeting that year with. The Bundeswehr, as of January 2026, has 186,000 active troops. Some battalions are manned at 30–50%. Germany plans to become "Europe's strongest army"… by 2039. And about the 2029 threshold itself, officials are already clarifying that it is "not a date of readiness, but the date by which an architecture of readiness must exist — without the full set of tools." Europe set its own combat-readiness for 2029 — the exact year its own intelligence expects a test of its resolve. The warm bath set an alarm for the morning of the fire — and specified that it would be an alarm with no ring, but with architecture. This is where the satire ends and the arithmetic the warm bath doesn't want to do out loud begins. Between the reconstituted Russian army — Putin ordered it brought to 1.5 million active personnel back in 2024, the second-largest in the world after China's — and Warsaw, Vilnius, Chișinău stands exactly one force. Not the Bundeswehr with its half-manned battalions. Not the working group on harmonising urgency. The Ukrainian army — around a million people under arms, the largest and most battle-hardened in Europe, four times the size of the next one down, with the only real experience of modern war on the continent. Europe's bath is buying itself time with someone else's body — and calling it "support for partners." As long as the Ukrainian front holds the line, Russia's million-strong army is pinned to the Donbas, not to the Suwałki corridor. Take that army off the board — through a "freeze," through fatigue, through yet another PDF on "sustainable engagement" — and the deferred bill arrives not in euros. It arrives in the Baltics, in Moldova with its Transnistria, in the Balkans. Then the bath has to be paid for in territory, and territory, unlike debt, doesn't get restructured. Ukraine is not charity that Europe finances. It's a prepayment so that its own intelligence's year 2029 does not arrive in Tallinn. And the cheapest shell for Europe is the one flying toward Pokrovsk today, not the one flying toward Narva the day after tomorrow. Three ways the bath can blow up So as not to look like someone selling only fear, I'll name the risks of this construction too — because the bill can be written badly as well. One: borrow-now-pay-later. The EU and member states launch defence through debt and fiscal flexibility. That isn't necessarily bad — but the bill doesn't disappear, it merely changes costume. Today it's an "escape clause" in the budget rule; tomorrow it's a line item called "debt servicing," eating into that same pension channel. It's a mirror of how Russia finances its war by writing hidden debt onto the balance sheets of state banks: two bookkeepings of denial, just from opposite ends of the same continent. Two: procurement inflation. When all twenty-seven rush at once to buy steel, explosives, chips, radars, drones, and rare-earth metals, the price starts behaving like an Erasmus student after the first stipend — beautifully, loudly, and with no plan whatsoever for the morning. The steel market in such moments resembles Airbnb in Barcelona in August: demand is there, supply is there, and common sense has taken a holiday. Three: captive-state capture. When a state depends on a handful of defence "champions," the regulator gradually becomes a client, and the client a hostage. Democracy doesn't fall with a crash at that point. It simply starts, quietly, to speak procurement-English — and one day you notice the tender is already written for a single bidder, and the word "competition" has been left in the press release for decoration. The personal bill: check three pockets Now the most uncomfortable part. Everything above is not news from another planet. It's a transmission channel that ends in your daily life. Here's a matrix — not investment advice (no one here will tell you to buy Rheinmetall stock, that would be a cheap trick), but a diagnostic of your own vulnerability. If you're…What to check right now A Ukrainian founder with EU clientsWhether your clients sit in defence-adjacent chains: compliance, cyber, logistics, data, resilience. That's where budgets grow while others shrink. An engineer / AI / hardware personWhether your specialisation could become dual-use within 18 months. If so — that's not a threat, it's the longest contract queue of the decade. Living in the EUWhether your mortgage, rent, and taxes are sensitive to the sovereign-yield channel. The Bund rises, your payment rises — even if you've never heard the word "Bund." A parent of a child about to enter universityWhich programmes are being reshaped around robotics, autonomy, cyber, aerospace. The map of prestigious professions is being quietly rewritten right now. Working with UkraineHow to package Ukrainian adaptation not as "heroism" but as defence-tech capability. The first triggers sympathy. The second triggers contracts. If you think this isn't about you — check three pockets: your housing, your pension, your job. Geopolitics likes coming in through daily life, because that's where the security is weakest, and the lock on your door you last changed back during the peace dividend. Who's left lying on the wet floor after the bath I won't end on "Europe must wake up." It already has woken up — the only question is who's lying on the wet tile while it gropes for a towel, and whether it manages to get back on its feet before its own intelligence turns out to be right about the date. Europe didn't become militaristic. It became more honest: security has a price again, and that price has stopped hiding behind the words "partners," "stability," "values," and "post-war order." Ukraine paid first, with its body — with cities, with nights, with children in shelters and with workshops where death is re-soldered into the next version of a drone. Europe now pays in money, debt, pensions, the labour market, and industrial subsidies — and for now it pays slowly, as if entitled to an instalment plan the front never granted it. The warm bath hasn't disappeared. There's just an invoice floating in it now — next to a rubber duck in a helmet that turned out to be not a toy but an inspector. And if you don't see that invoice, it doesn't mean it isn't there. It only means it's already been written — in your name, in a currency that will be chosen without you: in euros, if you're lucky; in territories, if Europe keeps harmonising the urgency while someone else's army holds the clock for it. Sources & context SIPRI (April 2026) — world military spending 2025: $2.887 trillion (+2.9% real); Europe +14% to $864 billion: sipri.org Eurostat (early estimate) — EU social benefits 2024: €4.925 trillion, 27.3% of GDP; old age/survivors 47%, sickness/healthcare 29.7%: ec.europa.eu/eurostat Council of the EU — EU member-state defence spending 2025: ~€381 billion, 2.1% of GDP: consilium.europa.eu NATO — The Hague declaration, 25 June 2025: 5% of GDP by 2035 (3.5% core + 1.5% security): nato.int; the estimate of the total increase to $2.36 trillion / +$912 billion — Janes, Atlantic Council. European Commission — White Paper / ReArm Europe — Readiness 2030 (19 March 2025), up to €800 billion; SAFE as the first pillar: defence-industry-space.ec.europa.eu Council of the EU — SAFE: €150 billion in loans for joint procurement (27 May 2025); Ukrainian defence industry associated "from the very start": consilium.europa.eu Ifo / EconPol — "European Defence Spending in 2024 and Beyond": peace dividend; social spending rose 2.4-fold, GDP 1.9-fold: ifo.de OSW — Germany's 2026 budget: defence ~€83 billion + €25.5 billion from the special Bundeswehr fund; military aid to Ukraine €11.5 billion; social spending ~38% of federal expenditure: osw.waw.pl Ifo (18 Nov 2025) — pension insurance subsidy in the 2026 budget: €127.8 billion, 33.3% of tax revenue: ifo.de Rheinmetall — factory opening in Unterlüss (2025): up to 350,000 155-mm shells/year by 2027; 25,000 in 2025, 140,000 in 2026: rheinmetall.com Tradeweb / Trading Economics — 10-year Bund: +34 bps in March 2025 to 2.73% after Merz announced the loosening of the debt brake; ~2.95% in late May 2026: tradeweb.com Reuters (10 March 2025) — Ukraine planned ~4.5 million FPV drones in 2025 (more than 1.5 million the year before); 96% domestically produced: reuters.com RNBO (National Security and Defence Council of Ukraine) — estimate of Ukrainian industrial capacity: more than 8 million FPV drones/year as of 2026 (official claim): rnbo.gov.ua CSIS / Naval News / Kyiv Independent — Magura naval drone shot down a Russian Su-30 (May 2025), by the CSIS assessment the first case in history of a surface drone destroying a combat aircraft: csis.org EU NEIGHBOURS east — EU4UA Defence Tech / Brave1: a €3.3 million grant programme for interceptors and radars (December 2025): euneighbourseast.eu BND (Bruno Kahl) / B. Pistorius — warning of a possible test of NATO by Russia around 2029; the Bundeswehr's first military strategy sets 2029 as the "kriegstüchtig" threshold, with Russia "the greatest and most immediate threat": Kyiv Post, Euronews (December 2025). Bundeswehr — 186,221 active troops (January 2026); plan for 260,000 by the mid-2030s; "Europe's strongest army" — a goal for 2039; some battalions manned at 30–50%: Wikipedia (Bundeswehr), Defense News (22 April 2026). Putin's decree (September 2024) — increase of the Russian army to 1.5 million active personnel (2.38 million total), the second-largest after China's: CBC, NBC News. Foreign Affairs / Atlantic Council / Estonian MFA — the Ukrainian army ~1 million, the largest and most battle-hardened in Europe, more than four times the next one down: Foreign Affairs ("Europe's Untapped Arsenal"), Atlantic Council. Methodological note: the estimates from SIPRI, NATO, the European Commission, and Eurostat are calculated under different methodologies and are not always directly comparable. The RNBO figure of 8 million FPV drones is given as an official Ukrainian estimate, not as an independently verified fact. This text contains no investment advice regarding defence companies.