The European Commission unveiled Tuesday, March 4, a plan to “rearmer Europe” which aims to mobilize nearly 800 billion euros for its defense, including 150 billion loans, and provide immediate assistance to Ukraine.
“Europe faces a clear and immediate danger of a magnitude that none of us has known in its adult life,” said its president Ursula von der Leyen, in a letter addressed to the leaders of the 27. “The future of a free and sovereign Ukraine, of a Europe in security and prosperous, is at stake,” she assured in this letter, which presents a plan in five components.
This project, called “Rearmer Europe”, will have the capacity “to mobilize nearly 800 billion euros in arms expenditure for a safe and resilient Europe”. The first “pillar” of this plan plans to put some 150 billion loans available to the 27 EU countries to finance defense capacity building in Europe. These funds must be used as a priority to invest in the fields where needs are the most urgent such as anti-aircraft defense, missiles, drones and anti-ground systems or artillery systems.
Ursula von der Leyen has also confirmed her desire to encourage member states to spend more for their defense, without concern for compliance with budgetary rules which force them to limit their public deficit to 3 % of their gross domestic product (GDP). “This will allow member states to significantly increase their defense expenses without triggering the excessive deficit procedure,” she said. This exemption will concern the loans provided by the overall envelope of 150 billion euros, according to his letter to the member states.
Finance defense projects with assistance funds for disadvantaged regions
The Commission also intends to use assistance funds for the most disadvantaged regions of the EU, so -called cohesion funds, to finance defense projects. The total of these funds for the period 2021-2027 is 392 billion euros, but Ursula von der Leyen did not specify the amounts which could be available for investments in the defense.
The president of the European Commission also intends to facilitate the use of the European Investment Bank (BEI) for the financing of defense projects. This bank is not currently authorized to finance projects directly linked to the Defense sector. Finally, the European Commission wants to further mobilize the private sector for defense financing in Europe.
The total of these measures should make it possible to mobilize up to 800 billion euros in favor of the defense, said Ursula von der Leyen. The leaders of the 27 will discuss it Thursday in Brussels for an extraordinary summit.