The European Commission (EC) announced that under the “ReArm Europe” initiative, €650 billion will come from the EU member states to bolster defense efforts over the next four years. Additionally, €150 billion will be provided as loans to the member states from the EC, with the overall goal of raising €800 billion for the program.

During a debate on security at the European Parliament in Strasbourg, EC President Ursula von der Leyen outlined the details of the plan. She highlighted that member states could redirect unspent cohesion policy funds towards defense projects, including infrastructure, research, and development. This redirection would be voluntary, with the final decision resting with the European Parliament and the EU Council.

Bulgarian Prime Minister Rosen Zhelyazkov indicated that Bulgaria would seek to redirect funds from the Recovery and Resilience Mechanism (RRM), created in response to the COVID-19 pandemic, rather than the cohesion fund. Von der Leyen emphasized that the national escape clause, which allows for flexibility in national budgets, is crucial for the mobilization of these investments.

Von der Leyen explained that the current defense spending of just under 2% of GDP across the EU needs to rise to over 3%. With the European budget representing less than 1% of the EU's GDP, she stressed that new investments would have to come from member states. The EC’s proposal is designed to allow EU countries to gradually increase their defense budgets by 1.5% of GDP, resulting in a total of €650 billion over the next four years.

As part of the plan, the EC also proposed loans of up to €150 billion for member states, focusing on strategic capabilities such as air defense, drones, and cyberspace. These loans would require investments in European manufacturers to strengthen the continent’s defense industry, with multi-annual contracts to ensure industry predictability. Von der Leyen pointed out successful initiatives, such as the Czech Republic and Denmark's efforts to supply Ukraine with weapons and ammunition, which have been effective in supporting the broader European security effort.

Given the urgency of the situation, particularly the ongoing conflict in Ukraine, the EC has opted for an expedited process under Article 122, which allows emergency financial assistance to address supply chain issues. Von der Leyen noted that the situation in Ukraine reflects a broader security challenge for Europe, as Russia's military-industrial complex is outspending the entire European continent.

The aim of the rearmament plan is to enhance Europe’s defense capabilities and ensure it is better prepared for the challenges posed by hostile actions, particularly from Russia. The EU's security strategy now involves strengthening its defense infrastructure, increasing investments in military capabilities, and ensuring that Europe remains prepared for any potential threats.

Sources:

• European Commission
• Club Z
• Euronews
• BTA