European Commission presents plan to rearm EU countries for 800 billion euros
20 March 08:49
The European Commission has published the White Paper on European Defense and the European Rearmament Plan, an ambitious defense package that provides EU member states with financial leverage to increase investment in defense capabilities. This was announced by the European Commission, "Komersant Ukrainian" reports.
They explained that the ReArm Europe/Readiness 2030 plan strengthens the pan-European defense capability with new financial means, and the White Paper defines a new approach to defense and investment needs.
What the White Paper emphasizes
This document outlines a number of key areas of action:
– addressing capability gaps, focusing on critical needs identified by Member States;
– support for the European defense industry through aggregate demand and increased joint procurement;
– support for Ukraine through increased military assistance and deeper integration of the European and Ukrainian defense industries;
– deepening the pan-European defense market, including by simplifying rules;
– accelerating defense transformation through disruptive innovations such as AI and quantum technologies;
– increasing Europe’s preparedness for worst-case scenarios by improving military mobility, stockpiling and strengthening external borders, including the land borders with Russia and Belarus;
– strengthening partnerships with like-minded countries around the world.
What does the ReArm Europe/Readiness 2030 plan include?
As announced by the President of the European Commission Ursula von der Leyen, this particular plan envisages spending more than 800 billion euros, structured around a number of components.
First of all, it is about freeing up the use of public funding for defense at the national level.
The Commission has proposed that member states activate the national exit clause of the Stability and Growth Pact, which would provide them with additional budgetary space to increase defense spending within the framework of EU fiscal rules.
In light of the current extraordinary circumstances, the European Commission will raise up to €150 billion on the capital markets, building on its well-established, unified approach to financing, to help Member States to quickly and substantially increase investment in Europe’s defense capabilities. These funds will be disbursed to interested Member States on demand, based on national plans.
The disbursements will take the form of long-term loans at a competitive price and attractive structure.
The ReArm Europe/Readiness 2030 plan also relies on the European Investment Bank Group to expand its lending to defense and security projects while maintaining its financial capacity.
How the new EU defense fund will work
Companies from the US, UK, and Turkey will not be able to participate in this €150 billion EU fund unless their countries sign defense and security agreements with Brussels. According to the FT , this is part of the Buy European initiative promoted by France. The goal of the new approach is to strengthen the EU defense industry and reduce dependence on foreign suppliers.
In particular, it concerns advanced weapons systems where a third country has the right to restrict the use of certain components or control their use. This applies, for example, to the US Patriot air defense system from RTX and other US systems where Washington dictates the terms of use.
At least 65% of product spending should be made by companies from the EU, Norway, and Ukraine. The remaining 35% can be spent on goods from countries that have signed a security agreement with the EU.
The proposal still needs to be approved by the majority of EU countries.
