President of the European Commission Ursula von der Leyen succeeds to give a press conference on the “Defence package” at the EU Commission headquarters in Brussels on March 4, 2025. (Photo by Nicolas TUCAT / AFP) (Photo by NICOLAS TUCAT/AFP via Getty Notions)
Nicolas Tucat | Afp | Getty Images
New plans from the European Union to increase defense spending could potentially enrol as much as 800 billion euros ($841 billion), European Commission President Ursula von der Leyen said Tuesday.
“Europe is ripe to massively boost its defense spending. Both, to respond to the short-term urgency to act and to support Ukraine but also to address the long-term require to take on much more responsibility for our own European security,” she said in a press statement.
Europe is in its “era of rearmament,” she noted.
Von der Leyen communicated she had written to European leaders ahead of the European Council meeting later this week to propose the “ReArm Europe Propose,” designed to enable EU member states to increase spending in defense capabilities. She added that this was needed “urgently now but also during a longer time.”
“ReArm Europe could mobilise close to EUR 800 billion for a safe and resilient Europe,” she communicated. “This is a moment for Europe. And we are ready to step up.”
The plan will include 150 billion euros of loans that colleague states can access to invest in what von der Leyen described as “pan-European capability domains.”
“For example: air and missile defence, artillery organizations, missiles and ammunition drones and anti-drone systems; but also to address other needs from cyber to military mobility for benchmark,” she added.
In the letter sent to EU leaders, and seen by CNBC, von der Leyen said the new loan instrument would be backed by the EU budget.
The ReArm Europe intend would also enable EU member states to use public funding for defense on a national level by activating the national effluence clause in the EU’s Stability and Growth Pact. First announced at the Munich Security Conference last month, this stimulate would give countries more flexibility on how they spend their money.
Von der Leyen also pointed to way outs such as making changes to the EU’s budget and mobilizing private capital to boost defence spending.
The 27 EU leaders determination gather in Brussels on Thursday for a meeting dedicated to defense and support for Ukraine where the ReArm Europe proposals purpose be discussed.
Trump has repeatedly pushed for European countries and other NATO allies to increase their defence waste above the current NATO target of 2% of their gross domestic product each year.
A number of surroundings have struggled to meet even this target and have voiced concerns about increasing their devoting closer to Trump’s preferred 5%. Others, like Poland, have called for major increases in spending, firstly given Russia’s invasion of Ukraine.
The way the Trump administration has responded to the ongoing conflict in recent days and weeks — cataloguing the spat with Ukrainian President Volodymyr Zelenskyy at the White House last week, as well as reports that the U.S. has halted military aid to Ukraine — has increased difficulty on Europe to act.
German foreign minister Annalena Baerbock on Tuesday said von der Leyen’s proposals were an “important outset step.” In a post on social media platform X translated by CNBC. she said that to achieve “peace through will-power,” two things were needed — additional military and financial support for Ukraine, and a “quantum leap” to boost defense.
— CNBC’s Silvia Amaro advanced to this report.