Saturday, 15 March 2025
European Commission President Ursula von der Leyen has outlined a new defence package aimed at significantly increasing Europe’s military capabilities. Speaking ahead of the European Council meeting, she emphasized that Europe must act decisively to address growing security threats and take greater responsibility for its own defence.
Von der Leyen acknowledged that European security is under direct threat and that member states are prepared to increase defence spending. She stated that Europe is entering an era of rearmament and must respond both to immediate security challenges, including support for Ukraine, and to long-term defence needs. To facilitate this, she introduced the ReArm Europe Plan, a set of financial measures designed to help EU countries rapidly expand their defence investments.
The plan includes five key components. The first is a proposal to activate the national escape clause of the Stability and Growth Pact, which would allow EU member states to increase defence spending without triggering the Excessive Deficit Procedure. Von der Leyen noted that if countries raised their defence budgets by 1.5% of GDP, it could generate fiscal space of nearly EUR 650 billion over four years.
The second measure involves a new financial instrument offering EUR 150 billion in loans for member states to invest in military capabilities. The focus will be on joint procurement of key defence assets, including air and missile defence systems, artillery, drones, ammunition, cyber defence, and military mobility. This approach aims to reduce costs, enhance interoperability, and strengthen Europe’s defence industry, while also ensuring immediate military support for Ukraine.
Von der Leyen also outlined plans to leverage the EU budget to direct more funds toward defence investments. She proposed additional options for member states to use cohesion policy funds for this purpose.
The final two elements of the plan focus on mobilizing private capital. This will be achieved by accelerating the Savings and Investment Union and working with the European Investment Bank to finance defence-related projects.
Von der Leyen stressed that the ReArm Europe Plan could mobilise nearly EUR 800 billion to enhance Europe’s security and resilience. She reaffirmed the EU’s commitment to NATO and continued cooperation with its partners. With these measures, she stated, Europe is ready to take responsibility for its own defence and step up to the challenges ahead.
Source: EC
