Weaponized Scarcity: Sanctions, Shocks, and Migration and the Reconfiguring Europe’s Defence Systems

Declining trust in political institutions is reshaping the foundations of security, economic stability, and defence planning across advanced economies. When governments and institutions are perceived as unable to guarantee legal and commercial protections, investment retreats — from energy infrastructure to agricultural production to industrial innovation. This withdrawal destabilizes markets, amplifies price shocks, and constrains the long‑term planning required for defence security and integration. As capital becomes defensive rather than generative, black‑market activity expands, infrastructure deteriorates, and innovation slows. These dynamics directly undermine the construction of a European defence, which depends not only on military capabilities but also on stable markets, credible governance, and public confidence. Financial behaviour underscores this erosion of institutional trust. In several markets, major asset managers have reallocated capital away from politically exposed environments and toward instruments perceived as more insulated from volatility. Such shifts signal a broader pattern: when institutional credibility weakens, investment in strategic sectors — including energy, agriculture, and defence‑industrial capacity — becomes more fragile. Underinvestment in these systems slows the energy transition, raises agricultural input costs, and constrains Europe’s ability to scale defence production or support conflict resolution, such as Ukraine’s reconstruction. This paper argues that three interconnected dynamics — sanctions governance, energy‑market volatility, and societal distrust — are jointly transforming the EU’s emerging defence ecosystem. First, the EU’s use of windfall profits from immobilised Russian state assets represents an unprecedented experiment in financial statecraft. As debates intensify over whether principal assets may eventually be used for reconstruction, this mechanism is becoming embedded in broader defence and recovery planning, expanding supranational authority in a domain traditionally dominated by member states. Second, the reconfiguration of gas supplies and the volatility of global energy markets have generated cascading effects across agriculture, food prices, and industrial production. Fertiliser tariffs and shortages, rising regulation, and climate‑driven crop failures have contributed to farmer protests in France and the UK, heighting political contestation across Europe. These pressures intersect with agricultural stress in the United States, where labour‑enforcement policies have contributed to farm‑sector labour shortages, unharvested crops, and higher consumer prices. Such dynamics illustrate how agricultural regulation, tariffs, and labour constraints spill over into migration pressures, consumer costs, and politicised welfare debates reinforcing the broader pattern of weaponized scarcity. Third, the contraction of international aid budgets risks intensifying migration at a moment when European publics are increasingly distrustful of political institutions. As food insecurity deepens in aid‑dependent regions, migration becomes further politicised and securitised, reinforcing narratives of scarcity and fear. This dynamic risks amplifying domestic tensions, increasing reliance on social‑protection systems, and fuelling political movements that oppose deeper defence integration.By linking financial, energy, and societal dimensions, the paper offers a multidimensional account of how geopolitical shocks and domestic vulnerabilities are redefining the EU’s identity and capacity as a security actor.