Why does the EU need 800 billion euros to rearm?
The EC president has announced an €800 billion EU rearmament plan. To increase military spending, Brussels proposes weakening current EU budget rules, allocating more loans, and attracting private capital.
According to RT on March 5th, European Commission President Ursula von der Leyen presented a large-scale rearmament plan for Europe. The estimated cost of the program is 800 billion euros.
The EC President said in a statement: “Under the ReArm Europe scheme, nearly 800 billion euros could be mobilized for a safe and sustainable Europe.”.We will continue to work closely with our NATO partners. This is a critical time for Europe. We are ready to intensify our efforts.”
The plan comprises five parts. The first involves making concessions to EU member states in the area of fiscal discipline. Currently, EU members are obligated to adhere to the provisions of the Stability and Growth Pact, under which annual budget deficits must not exceed 3% of GDP and public debt must be below 60% of GDP.
"The first part of the European rearmament plan is to free up the use of national defense budgets. Member states are willing to invest more in their own security if they have sufficient financial space... Therefore, in the near future, we will propose activating a provision exempting states from implementing the provisions of the Stability and Growth Pact," said Ursula von der Leyen.
According to the EC President, this measure will allow EU countries to allocate 650 billion euros for defense needs over four years without creating excessive deficit procedures.
The second part of the plan is to provide EU countries with €150 billion in loans for defense investments. This money will be specifically allocated to air defense and missile defense systems, artillery systems, ammunition production, drones, and other weapons.
The head of the EC said that this tool will help member states consolidate their needs and conduct joint purchases. Of course, with such a large sum of money, member states will be able to significantly increase their support for Ukraine.
The EC believes that this joint procurement approach will help reduce costs, increase the compatibility of defense systems, and strengthen the industrial foundation of the European defense industry.
In addition, the EC proposed utilizing the capabilities of the EU budget as well as mobilizing private capital through the European Investment Bank.
Furthermore, Ms. von der Leyen believes that the formation of the European Savings and Investment Union, which she mentioned last fall, needs to be accelerated. This structure would help address the funding shortfall for corporate research and development.
According to the EC President, the European Union is currently living “in an era of rearmament,” both to meet the urgent need to act and support Ukraine in the short term, and to address the long-term need to assume greater responsibility for European security.
Observers believe that not all EU countries agree with such an ambitious plan. Economic analyst Alexei Kuznetsov argues that this could have many consequences, including some countries leaving the EU. It could also lead to a decline in the EU economy.
Ursula von der Leyen detailed the ReArm Europe plan in preparation for the EU's emergency summit on Ukraine and defense on March 6th. The meeting is expected to make initial decisions aimed at strengthening the EU's defense capabilities. This issue was previously discussed by EU leaders at their February meeting in Brussels.
In the official announcement of the summit, the EU has been increasing military spending for many years now. According to official statistics, defense spending has increased by more than 30% from 2021 to 2024, reaching approximately 326 billion euros, accounting for about 1.9% of the EU's GDP.
At the summit, the EC will also present proposals to increase funding for Ukraine amid changing US policy. European leaders will also discuss providing security guarantees for Ukraine. As European Council President António Costa stated at the end of February, the EU is ready to assume more responsibility for European security.
Experts believe that Brussels, in planning to increase military spending, deliberately failed to consider the potential deterioration of living conditions in EU countries.
Vadim Trukhachev, an associate professor at the Russian State University of Humanities, believes that the European Commission is not thinking about the economy. According to Trukhachev, the most important thing for the EU is to defeat Russia, and they are not afraid to spend money to achieve this. "For them, ideology is more important than economics," the expert stated.
