The European Union is drafting its largest defense initiative since the Cold War, with plans to invest hundreds of billions of euros in strengthening the bloc’s security.
The proposal, led by European Commission President Ursula von der Leyen, outlines a three-pronged strategic plan to expand military capabilities and improve funding mechanisms. “This is a once-in-a-generation moment that requires urgent thinking and a strategic rearmament plan for Europe,” said von der Leyen, emphasizing the need for immediate action.
The EU’s new security framework will be discussed at an emergency summit of bloc leaders on March 6. Subsequently, on March 19, Defense Commissioner Andrius Kubilius and EU High Representative for Foreign Affairs Kaja Kallas will present a comprehensive defense industry strategy. Meanwhile, negotiations continue to determine how to expand Europe’s military resources.
Three Pillars of the Financing Plan
According to Bloomberg, the defense financing plan proposed by von der Leyen is based on three main elements:
Relaxation of Fiscal Rules for Defense Spending
EU member states will be able to increase their military budgets without these expenditures being counted towards their budget deficit. The measure could unlock up to €160 billion in additional defense investments. The debate revolves around defining which defense expenditures qualify under this rule, how long it will be in effect, and its alignment with NATO’s target of allocating 2% of GDP to defense.
Creation of a Joint EU Defense Fund
The proposal aims to establish a centralized military financing mechanism to support joint investments in air defense systems, long-range strike capabilities, missile production, drones, and military artificial intelligence. However, the idea of financing the fund through joint loans remains a divisive issue among member states.
Relaxation of Investment Restrictions for the European Investment Bank (EIB)
Currently, the EIB can only finance dual-use goods (civilian and military). The proposal would allow the bank to finance purely military projects, expanding access to financial resources, including support from private banks.
In addition to these measures, von der Leyen suggested redirecting unused EU funds, including those initially allocated for post-COVID-19 recovery efforts. This proposal is still under discussion, with negotiations taking place behind closed doors to optimize the bloc’s financial resources for defense readiness.
The initiative represents a significant shift in the EU’s defense posture, reflecting the bloc’s growing concern over global security and its ability to respond to emerging threats, primarily from Russia.
Source and images: X @vonderleyen / @EtatMajorFR / @NATO / defence-blog.com. This content was created with AI assistance and reviewed by the editorial team.
