In the coming decades, governments will need to fund three structural pressures at the same time: ageing-related expenditure, higher defence spending and rising interest payments. We estimate that, absent offsets elsewhere, they would mechanically widen deficits by at least 3 percentage points of GDP by 2040 in most euro area countries. However, borrowing cannot be the only answer. We see the most plausible path as combining a gradual spending freeze, reallocation away from low-multiplier expenditure and protection of public investment, alongside defence-industrial policies supporting domestic and European procurement. […]