The European Union is preparing its most extensive defense initiative since the Cold War, with plans to allocate hundreds of billions of euros to strengthen security across the bloc.
The ambitious strategy, proposed by European Commission President Ursula von der Leyen, consists of a three-part plan to enhance military capabilities and financing mechanisms.
“This is a once-in-a-generation moment that requires ‘urgent thinking’ and a strategic rearmament plan for Europe,” von der Leyen stated, emphasizing the need for immediate action.
The EU’s new security framework will take shape during an urgent summit of EU leaders on March 6. Following this, Defense Commissioner Andrius Kubilius and EU High Representative for Foreign Affairs Kaja Kallas will present a comprehensive defense industry strategy on March 19. Until then, negotiations will continue to determine how to expand the EU’s defense resources.
According to Bloomberg, von der Leyen’s proposed defense funding plan consists of three key elements. While the full implementation of these measures remains uncertain, they outline a major shift in EU defense spending:
Relaxing Fiscal Rules for Defense Spending – EU member states would be allowed to increase defense budgets without these expenditures contributing to budget deficit calculations. Officials estimate this could unlock up to €160 billion in additional defense spending. The debate focuses on defining which defense expenditures qualify under this rule, how long it will be in effect, and its alignment with NATO’s 2% of GDP defense spending target.
Creating a Joint EU Defense Fund – A new centralized EU defense funding tool would be established to support joint investments in air defense systems, long-range strike capabilities, missile production, drones, and military artificial intelligence. Some EU officials and member states advocate for common borrowing, but this remains a divisive issue within the bloc.
Easing Investment Restrictions for the European Investment Bank (EIB) – Currently, the EIB can only finance dual-use goods. The proposed changes would enable the bank to fund purely military projects, opening new financial channels, including support from private banks.
In addition to these measures, von der Leyen has suggested repurposing unspent EU funds, including those initially allocated for post-COVID-19 recovery efforts. This proposal is being discussed behind closed doors as the EU explores ways to optimize its financial resources for defense readiness.
The initiative underscores the EU’s growing focus on defense integration amid global security concerns.
