The NATO-summit confirms: defense budgets will rise to 5%. The means the Netherlands must spend more, but where will the money come from? Political scientist Natascha van der Zwan, who has studied financial markets for a decade, sees a solution in pension funds - provided the EU classifies defense as sustainable.
You study financial markets, can you explain what that entails?
'I focus on the politics behind investment decisions, particularly around sustainability in Europe. In 2018, the EU committed to becoming a global leader in sustainable finance. That led to a giant policy programme aimed at making financial institutions more accountable for how they use their capital and the social and environmental consequences of their choices.
One of the cornerstones is the EU's green taxonomy - an official list of economic investment activities that qualify as sustainable. Companies must now disclose how closely their investments align with that list.'
What kinds of activities made it onto that list?
'Getting that list together was a political minefield. It includes sectors like renewable energy, clean water, and circular manufacturing. Controversially, gas also made the cut, despite fierce opposition from NGOs. Lobbyists from member states and industries had considerable sway. France, for instance, lobbied heavily to include nuclear energy, even though it remains divisive.'
And defense is not on that list?
'No, but the pressure to include it as sustainable is mounting. Finland, which feels the Russian threat acutely, has long advocated for defense to be recognized as sustainable. They didn't have enough support. But now, with Trump's impact on NATO and Europe's growing realisation that it can't always rely on the U.S., the political mood is shifting.
We should protect our own continent, so there is a renewed interest to fund defesne from the financial private sector. A safe and secure society is also a from if sustainability. Defense is being reframed, not just as a conflict and weapons, but as a foundation for stability and safety.'
Could the NATO summit drive this change further?
'Absolutely. If leaders agree to significantly ramp up defense spending - say to 5% of GDP - that's a massive financial commitment. Governments have limited room to maneuver: they could raise taxes or cut other spending, but often they look to financial markets.
The Netherlands, for instance, has one of the world's largest pension systems, with funds worth nearly twice the national GDP. When that much capital is concentrated in one place, politicians see an opportunity to steer it toward new priorities, including defense.
So yes, I see a real possibility that the Dutch government won't just ask: 'What can we cover with public funds?' but also: 'Which private capital can we activate?'.
And if the political wind shifts away from defense?
'Then the money disappears just as fast. You can buy and sell stock in a heartbeat - and investors follow the dominant political current.
What worries me is that defense could start to crowd out other sustainability goals. Climate and social resilience are being sidelined, even though those, too, are about safety from floods, from drought, from inequality. If we lose sight of that, we've missed the point of sustainability altogether.'
