European Commission President Ursula von der Leyen has unveiled a comprehensive five-part plan to mobilise approximately €800 billion to strengthen Europe’s defence capabilities and provide immediate military support to Ukraine following the suspension of US aid.
In a letter to EU leaders, von der Leyen described the plan as a response to the growing security threats facing Europe. “A new era is upon us,” she stated, emphasising that the continent faces dangers of an unprecedented scale. Her plan, called “ReArm Europe,” aims to fund defence initiatives and increase Europe’s military readiness.
The first aspect of the proposal includes suspending the EU’s strict budgetary rules, enabling member states to significantly increase defence spending without triggering penalties for exceeding deficit limits.
The second component of the plan introduces a new mechanism to provide €150 billion in loans to EU states for defence investments. “This is about spending better and spending together,” von der Leyen stated. The funds will be allocated to key areas such as air and missile defence, artillery systems, drones, and anti-drone technologies, which will be used to enhance Ukraine’s military capabilities.
The third element of the plan involves reallocating existing EU budget funds towards defence-related investments. This would allow member states to repurpose “cohesion” funds, traditionally used to support the development of poorer regions, for defence purposes instead.
The final two proposals focus on utilising the European Investment Bank’s lending arm to support defence companies and establishing a savings and investments union to help firms access capital for military-related projects.
As US President Donald Trump’s outreach to Russia raises uncertainty about the future of American support for Ukraine, Europe is under pressure to bolster its own defences. The upcoming summit in Brussels, following emergency talks with Britain and NATO, is set to address these concerns and discuss long-term strategies for European security. “We are living in the most momentous and dangerous of times,” von der Leyen warned, stressing that Europe is ready to take action.
