As world leaders react to President Donald Trump's decision to suspend US military aid to Ukraine, the European Union has introduced a plan to enable member states to borrow €150 billion (approximately $158 billion) to enhance their defense capabilities and significantly increase military support for Kyiv.
European Commission chief Ursula von der Leyen unveiled a five-point proposal to boost European defense spending ahead of a crucial meeting of EU leaders in Brussels on Thursday.
Trump's shift in US foreign policy, moving away from supporting Ukraine and towards closer ties with Russian President Vladimir Putin, has prompted the bloc to urgently reassess its defense strategy.
Von der Leyen emphasized the critical nature of the current global situation, stating that the bloc must rise to the occasion.
The 'ReArm Europe' plan would allow EU member states to borrow funds for the purchase of military equipment such as air and missile defenses, artillery systems, missiles, ammunition, drones, and anti-drone systems, according to von der Leyen. This new loan instrument aims to significantly enhance support for Ukraine by providing immediate military equipment.
The EU could also utilize its budget in the short term to allocate more resources towards defense-related investments. National governments might have the option to redirect funds designated for projects aimed at equalizing living standards among member states to defense initiatives.
In addition, strict fiscal regulations could be relaxed to enable member states to boost defense spending. Von der Leyen suggested that if countries were to increase defense expenditure by an average of 1.5% of gross domestic product, it could create fiscal space of nearly €650 billion (around $685 billion) over a four-year period.
Overall, this five-point plan could potentially mobilize up to €800 billion (approximately $844 billion) for defense spending within the bloc, as per von der Leyen's projections.
