EU leaders will meet in Brussels on Thursday for a special summit focused on defense and Ukraine. Ursula von der Leyen, on Tuesday, proposed a “Rearm Europe Plan,” suggesting member states could mobilize up to €800 billion to significantly increase defense spending. This proposal came after Washington halted all military assistance to Ukraine, increasing pressure on the EU to enhance its own support. The European Commission President emphasized the importance of Europe taking a more significant role in its own security, both to address immediate needs and to support Ukraine, in the face of an era of rearmament.
Von der Leyen’s plan, outlined in a letter to EU leaders before Thursday’s summit, includes several measures to finance joint defense investments in capabilities such as air and missile defense, artillery systems, and drones. The plan proposes a new financial instrument to provide €150 billion in loans to member states for these investments. However, details on how this funding would be raised remain unclear, including whether unused funds from the post-COVID recovery plan could be utilized. The proposal also faces resistance from some EU countries, known as ‘frugal’ states, regarding the issuance of Eurobonds to fund defense needs.
Another key proposal is the activation of the Stability and Growth Pact’s national escape clause, which would allow member states to exclude defense spending from their national expenditures, thereby avoiding breaches of the EU’s fiscal policy limits. Von der Leyen suggested that if EU countries increase their defense spending by an average of 1.5% of GDP, €650 billion could be freed over the next four years.
Though EU member states have increased defense spending since Russia’s invasion of Ukraine in 2022, the spending levels vary significantly among countries. There are ongoing negotiations among NATO allies to increase the defense spending target, with a decision expected in June.
In addition to these proposals, von der Leyen suggested other measures such as the increased use of cohesion policy programs, expanding the European Investment Bank’s mandate to finance defense projects, and accelerating the Savings and Investment Union to encourage more private investment in defense. She stressed the need for Europe to act decisively and with ambition in response to current challenges.
Leaders will discuss this defense package at Thursday’s summit, which President Zelensky of Ukraine is expected to attend. Originally convened in response to Donald Trump’s diplomatic overtures to Russia, the urgency for the meeting intensified following a meeting between Zelensky and the American President, during which the Ukrainian leader departed early without signing a minerals deal. The situation escalated on Monday with Trump announcing the suspension of all military aid to Ukraine, citing the potential for a quick peace deal.
The upcoming summit may highlight divisions among member states regarding Ukraine, with Hungary and Slovakia threatening to veto any calls for increased military assistance. Draft conclusions of the summit, seen by Euronews, suggest that leaders will not make decisions on boosting defense spending at this meeting, instead addressing the topic at a later summit in March after the release of the Commission’s White Paper on Defence.
Source: https://www.euronews.com/my-europe/2025/03/04/von-der-leyen-pitches-800bn-defence-package-ahead-of-eu-leaders-summit
