Bloomberg: EU's plan to secure hundreds of billions for defense consists of three key elements
The European Union is preparing a major defence initiative, the largest since the Cold War. It plans to spend hundreds of billions of euros on security and is considering a three-part plan to do so.
"What we need in this once-in-a-generation moment is an ‘urgency mindset’ and a strategic plan to rearm Europe," Ursula von der Leyen, President of the European Commission, said.
As reported by Bloomberg, the new security framework will begin to take shape at an emergency meeting of EU leaders on 6 March. Then, on 19 March, Defence Commissioner Andrius Kubilius and chief diplomat Kaja Kallas will present a new strategy for the defence industry. Until then, negotiations on increasing the bloc's resources will continue.
Bloomberg reports that von der Leyen's defence funding plan will consist of three elements. Sources said that all of them are complex, and it is unclear to what extent they will be implemented.
The first part of the plan would allow EU countries to spend more by relaxing fiscal rules. According to some officials, this could help raise up to €160 billion.
Negotiations are focused on ensuring that defence spending is not counted in the calculation of budget deficits. They need to agree on what exactly counts as defence spending, how long the rule will be in place, and whether it will affect NATO's goal of defence spending at 2% of GDP.
The second part involves creating a new instrument for joint spending at the EU level. These funds would be used to invest in joint projects in areas such as air defence, long-range strikes, missiles, drones, and military artificial intelligence.
Some senior EU officials and member states have proposed the idea of joint borrowing, but this issue is controversial and causes disputes within the EU.
The third part of the plan concerns the easing of investment restrictions for the European Investment Bank. Currently, the bank can only invest in dual-use goods. This will allow it to attract more funding, including from private banks.
In addition, during the closed-door discussions, von der Leyen proposed redistributing unspent EU funds, including money raised for the COVID-19 pandemic recovery.
On 24 February, Ursula von der Leyen announced in Kyiv that she would present a plan to increase European arms production, which would also benefit Ukraine.
The German news outlet Berliner Zeitung reported that the EU was discussing a large-scale plan to increase defence spending and aid to Ukraine, which could reach about €700 billion.
Read more: Rearmament without the US: three mechanisms to secure additional defense funding for Europe