European Commission President Ursula von der Leyen has unveiled a comprehensive five-point plan, dubbed “ReArm Europe,” aiming to bolster the European Union’s defense capabilities in response to escalating geopolitical threats. This initiative seeks to mobilize approximately €800 billion to enhance the continent’s security and resilience.
Ursula von der Leyen says she has written a letter to European leaders that outlines that plan:
- Unleash the use of public funding on defense – if member states increase defense spending by 1.5% of GDP, Von der Leyen says this could create fiscal space close to €650bn over four years;
- New instrument providing €150bn of loans to member states for defense investment;
- Using the power of the European Union’s budget;
- Mobilizing private capital through the Savings and Investment Union;
- Mobilizing private capital through the European Investment Bank.
Von der Leyen explains the plans to strengthen Europe’s defense and increase military capabilities could mobilize around €800bn.
“This is Europe’s moment, and we must live up to it,” she noted.
Such a plan will force many EU member states to greatly increase their military spending, which is still below 2% of gross domestic product. NATO Secretary-General Mark Rutte has told the member states they need to move to more than 3% as quickly as possible.
The plan will now be the blueprint for Thursday’s summit, although immediate decisions beyond strong commitments are unlikely at this stage.
