President Trump’s decision to temporarily suspend military support for Ukraine, coupled with his implicit threat to withdraw US forces from Europe unless Nato allies increase their defence spending, has upended the near 80-year transatlantic alliance, and left European countries scrambling to respond.

European Commission President Ursula von der Leyen has called for a ‘surge’ in defence spending and said nothing is off the table when it comes to raising money. Last week, she unveiled an €800bn plan to allow member states to increase spending and borrow money for defence purposes without violating the bloc’s strict budget rules.  

But some EU member states have already pushed back, with highly indebted countries like Italy worried about the financial strain of the plan and Germany concerned about the implications for its fiscal conservatism.

So who will pay, how much will they pay, and what will it all mean for Europe’s economy, markets, and security?

In this podcast, ING’s Global Head of Macro Carsten Brzeski and Netherlands' Chief Economist Bert Colijn discuss the hard political and financial choices ahead for Europe and the chances of success.