26.08.2025, Moscow.
The crisis of EU car manufacturers, created by European bureaucracy, is advantageous to the defense industry, Rossa Primavera News Agency‘s Economy Desk on August 25.
Mercedes-Benz CEO and ACEA (European Automobile Manufacturers’ Association) president Ola Källenius told Handelsblatt that if the European Union authorities do not stop ignoring reality and continue to forcibly push environmental restrictions, it will lead to catastrophe.
“We need to face reality. Otherwise, we’ll just crash into a wall at full speed,” he said. Källenius was referring to the still-valid plan for a complete ban on the sale of cars with internal combustion engines (ICE), scheduled to take effect in 2035.
Back in the late 2010s, EU authorities began imposing regulations that effectively undermined the leadership of German carmakers. With baseless claims about supposedly more environmentally friendly electric vehicles, EU bureaucracy was destroying one of the main sectors of the economy – automobile production – through entirely non-market means.
All European car manufacturers, without exception, report sharp profit declines and predict inevitable losses in the near future. The industry leader, Volkswagen, has already begun large-scale layoffs and plant closures in Europe. The fact that the head of Mercedes allows himself such sharp statements indicates the depth of the crisis.
Despite this, European officials stubbornly refuse to abandon the deadly ban on ICE cars by 2035, even though it threatens rising unemployment and the shutdown of high-tech industries. At first glance, such a policy could only be explained by bureaucratic incompetence.
However, another explanation can be found, one that does not boil down to bureaucratic stupidity. To find it, one must recall the sector of the European economy that has been thriving in recent years. It is defense industry.
For the defense industry, the collapse of car manufacturers is advantageous in several ways. First, the freed-up high-tech factories and unemployed highly skilled workers drastically reduce costs for ramping up production. And the first news of such developments has already begun to appear.
Second, a high level of unemployment will reduce protests against militarization. After all, under such conditions, anyone dissatisfied with the strengthening of the defense industry can be branded as an enemy of labor market recovery.
