Europe's rearmament plan - Von der Leyen presents 800 billion euro defense package!
Ursula von der Leyen proposed a European rearmament plan on Tuesday that she said could see member states mobilise up to 800 billion euros to finance a massive increase in defence spending, hours after Washington suspended all military aid to Ukraine, putting pressure on the bloc to increase its own aid.
The five measures she outlined, which she details in a letter to EU leaders ahead of an extraordinary summit on Thursday, include a "new instrument" to provide 150 billion euros in loans to member states to finance joint defense investments in pan-European capabilities, including air and missile defense, artillery systems, missiles and ammunition, anti-drone systems and drones.
Von der Leyen, who did not take questions from reporters, did not give details on how the money would be raised and whether some 90 billion euros of unused money from the post-COVID-19 recovery fund would be part of it. The issuance of so-called Eurobonds to finance the bloc’s defense needs has so far been strongly opposed by some so-called ‘austere’ member states. The activation of the national escape clause of the Stability and Growth Pact is the other key measure in von der Leyen’s defense package, and one that she had already communicated last month in a keynote speech at the Munich Security Conference.
This would allow member states to exclude defence spending from their national spending and thus avoid running afoul of the bloc's fiscal policy, which requires government deficits and debt to remain below 3% and 60% of GDP respectively. The Commission chief claimed that if EU countries increased their defence spending by an average of 1.5% of GDP, €650 billion could be freed up over the next four years.
EU member states have massively increased their defense spending since Russia launched its full-scale invasion of Ukraine in 2022, but they spend unevenly: Poland spent 4.12% of its GDP on defense last year, while Spain spent just 1.12%. Negotiations are currently underway among NATO allies, which include 23 of the EU's member states, to increase the defense spending target from the current level of 2% of GDP. A decision is expected to be announced at a summit in The Hague at the end of June.
The three other measures proposed by von der Leyen include allowing member states to use more cohesion policy programs to increase defense spending, expanding the mandate of the European Investment Bank in order to boost the financing of defense projects, and accelerating the Savings and Investment Union to enable private banks to pour more money into the sector as well.
EU leaders are due to discuss the proposed defence package at an extraordinary summit in Brussels on Thursday, which Volodymyr Zelenskyy is expected to attend. The summit was convened on 23 February in response to Donald Trump’s rapid diplomatic overtures to Russia, but the sense of urgency was heightened on Friday after a contentious meeting between Zelenskyy and the US president at the White House, where the Ukrainian leader left before the end of his planned visit and without signing a mineral deal that Washington said could act as a deterrent against future attacks.
The row continued on Monday with Trump announcing that the US was suspending all military aid to Ukraine, arguing that a peace deal “could be reached very quickly” and claiming that “maybe someone doesn’t want to make a deal.” Thursday’s summit risks highlighting divisions among member states over Ukraine as both Hungary’s Viktor Orban and Slovakia’s Robert Fico have threatened to veto any calls for increased military aid to the war-torn country.
Draft conclusions of the first summit seen by Euronews suggest that leaders will not make decisions on how to increase defence spending at the meeting and will instead "return" to the topic at a later summit in March following the publication of the Commission's White Paper on Defence.
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