EU chief proposes defence spending package worth almost €800bn
By Frank Prenesti
Date: Tuesday 04 Mar 2025
(Sharecast News) - European leaders were putting together a plan that could see nearly €800bn raised for defence expenditure as US President Donald Trump paused all aid to Ukraine in an attempt to strong-arm Kyiv into signing a minerals deal.
European Commission President Ursula von der Leyen on Tuesday said the 27-nation bloc would propose giving member states more fiscal headroom for weapons spending, including €150bn in loans.
"This is a moment for Europe, and we are ready to step up." The proposals "could mobilise close to €800bn of defence expenditures for a safe and resilient Europe," she said, unveiling the "ReArm Europe" plan in Brussels.
EU leaders are scheduled to discuss the proposals at a summit on defence spending in Brussels on Thursday.
The move comes after Washington overnight suspended all US military aid to Ukraine. A heated row between Ukraine President Volodymyr Zelenskyy and Trump in the White House last Friday saw the former leave the US without any deal on minerals as compensation for billions in weapons and ammunition provided by Washington.
Trump has also held talks with Russia on setting up peace talks - at the exclusion of Ukraine and Europe - in a major pivot towards support for Moscow.
The commission €150bn in new joint EU borrowing would be used to buy air and missile defence, artillery systems, missiles, ammunition, drones and other needs.
"It will help member states to pool demand and to buy together. This will reduce costs, reduce fragmentation, increase interoperability and strengthen our defence industrial base," von der Leyen said.
"With this equipment, member states can massively step up their support to Ukraine. So, immediate military equipment for Ukraine. If member states increase their defence spending by 1.5% of GDP on average, this could create fiscal space of close to €650bn over a period of four years."
Reporting by Frank Prenesti for Sharecast.com
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