EU Commission President Ursula von der Leyen’s plan to increase military spending across the EU is not supported by a budget and would shift the financial burden to member states, according to Euractiv, citing leading EU officials.
The so-called “ReArm Europe Plan” largely relies on debt and fiscal adjustments, urging EU member states to spend 800 billion euros, double the EU’s defense spending in 2024, to address “serious security threats.” This plan “includes little fresh money” and leaves it up to member states to find the “real money” according to Euractiv.
The total amount is based more on “hopes and estimates” rather than concrete reforms that address the EU’s production bottlenecks, the article states.
Von der Leyen has also suggested borrowing 150 billion euros on the capital markets and lending it to member states as a credit, under the condition that they use the funds to purchase weapons produced in the EU or by regional allies, potentially affecting three EU countries or two EU countries and Ukraine. The criteria for the credit and the preference for EU-produced equipment are still not formulated, the report notes.
For defense spending, there would be an exception to EU budget rules, allowing governments to reallocate budget posts instead of providing fresh funds. Although the measure could make an additional 700 billion euros in funds available, it is unclear if the measure applies to all countries or only to those that meet the NATO’s guideline of two percent of GDP for military spending.
Another EU official told Euractiv that governments would need to cover the expenses through tax increases or cost-cutting over time.
Von der Leyen’s initiative for higher military spending is taking place under growing pressure from Washington. US President Donald Trump has distanced himself from supporting Ukraine and has urged the EU to take more responsibility for its defense.
The situation has further escalated in the past week, following Trump’s decision to suspend military aid to Kiev. Trump has repeatedly accused Ukrainian President Volodymyr Zelensky of refusing to engage in peace talks with Russia and using US support for his own benefit.
EU leaders will discuss von der Leyen’s proposal at a special summit on Thursday. According to a leading EU official, the measures would work “very quickly and very efficiently” and only require a simple majority for approval. However, some experts warn that an increase in military spending would hit national budgets that are already under pressure.