ReArm Europe Plan
The European Commission presents a set of proposals on how to use all financial levers to help Member States increase defence spending
Bogdan Matei, 05.03.2025, 14:00
With an increasingly aggressive Russia to the east and an increasingly distant America across the Atlantic, Europe is going through a period of insecurity that it has not experienced in decades. Against this background, the European Commission is proposing to the Union states a continental rearmament plan, which could mobilize 800-billion-euro worth of funds over the next four years. The proposal was presented ahead of the special summit of the EU, which will take place in Brussels on Thursday.
The president of the European Commission, Ursula von der Leyen, sent a letter to the leaders of the member states detailing the new European armament plan, as well as the support for Ukraine invaded by Moscow’s troops. Experts quoted by international press agencies note that the lack of production units in Europe is, at this moment, obvious. One example: the European Union pledged to supply Ukraine with one million artillery shells by 2024. The target was eventually reached, but several months late.
The president’s plan contains five funding instruments. The first would be to increase national defense budgets by 1.5% at the European level, which would mobilize around 650 billion euros in four years. A second instrument is loans for common defense projects, worth 150 billion euros. “This is basically about spending better and spending together. We are talking about pan-European capability domains. For example: air and missile defence, artillery systems, missiles and ammunition drones and anti-drone systems; but also to address other needs from cyber to military mobility for example. It will help Member States to pool demand and to buy together. Of course, with this equipment, Member States can massively step up their support to Ukraine”, said President von der Leyen, quoted by the Radio Romania correspondent in Brussels.
The third tool is the possibility for member states to use cohesion funds for defense projects. Two other sources of financing are private capital combined with loans from the European Investment Bank. Calculations show that, in this way, Europe could exceed 3.5% of the GDP for defense, which is exactly what the new Republican administration in Washington, led by Donald Trump, is also demanding.
Experts note that in her plan to rearm the Union, the President of the Commission proposes more freedom in complying with the usually strict rules regarding debts and deficits. The possibility of reallocating regional development funds for military investments is also mentioned, which can cause frustration in the poorest areas of the Union. Finally, experts say, private banks are generally reluctant to engage in military investment projects. (MI)
