EU chief unveils 800-billion-euro plan to 'rearm' Europe

BRUSSELS: EU chief Ursula von der Leyen Tuesday presented a five-part plan to mobilise some 800 billion euros for Europe’s defence — and help provide “immediate” military support for Ukraine after Washington suspended aid.

“A new era is upon us,” the European Commission president said in a letter presenting the plan to EU leaders, two days before a summit aimed at cementing joint action on support for Ukraine and European security longer term.

“Europe faces a clear and present danger on a scale that none of us has seen in our adult lifetime,” she wrote, as she outlined options for funding a European defence surge.

“‘ReArm Europe’ could mobilise close to 800 billion euros of defence expenditures for a safe and resilient Europe,” she told reporters in Brussels as she outlined the contents of her plan.

Part one involves proposing that the EU suspend strict budget rules to allow member states to ramp up their spending on defence.

“This will allow member states to significantly increase their defence expenditures without triggering the excessive deficit procedure,” she said, referring to a procedure that forces governments to bring deficit levels down if they violate the rules.

The second proposal will be a new “instrument” that will provide 150 billion euros of loans to member states for defence investment.

“This is basically about spending better — and spending together,” said von der Leyen. “We are talking about pan-European capability domains — for example: air and missile defence, artillery systems, missiles and ammunition drones and anti-drone systems.”

“With this equipment, member states can massively step up their support to Ukraine. So, immediate military equipment for Ukraine,” she said.

The third component would involve using the existing EU budget “to direct more funds towards defence-related investments.”

That would include allowing member states to repurpose so-called “cohesion” funds targeted at helping the development of poorer European countries — and using them for defence.

The last two areas of action would involve the bloc’s lending arm the European Investment Bank — which EU states want to drop limits on lending to defence firms — and a savings and investments union to help companies access capital.

US President Donald Trump’s direct outreach to Russia on ending the Ukraine war has thrown the country’s future into question and left Europe reeling on the sidelines.

Thursday’s Brussels summit — on the heels of weekend crisis talks also involving Britain and NATO — comes as Europe contemplates the stark prospect of the United States withdrawing longer-term support from Ukraine and more broadly from its European allies.

“We are living in the most momentous and dangerous of times,” von der Leyen said. “This is a moment for Europe, and we are ready to step up.”