European Commission President Ursula von der Leyen proposed a ‘Rearm Europe’ plan on Tuesday, to mobilise up to €800 billion for EU countries' defence spending and in immediate aid to Ukraine.
Two days ahead of an extraordinary European summit on Ukraine and European defence, the head of the European executive listed five main avenues of funding in a letter sent to the leaders.
The announcement comes hours after US President Donald Trump suspended all US military aid to Ukraine.
"We are living in dangerous times. Europe‘s security is threatened in a very real way," von der Leyen wrote on X.
Part of of the Commission President's proposal aims to give Member States more budgetary leeway by ensuring that their defence spending does not affect excessive deficit procedures for four years. This involves activating a clause to derogate from the rules of the Stability and Growth Pact at the national level.
Von der Leyen also proposes channelling 150 billion euros in loans to Member States towards pan-European capabilities in anti-aircraft and anti-missile defence, munitions, drones via joint purchases that would guarantee the interoperability of armaments.
It's also proposed that the Member States redirect the funding they receive from the Union under the cohesion policy (the socio-economic catching up of the less wealthy regions) towards their defence policies.
The fourth and fifth avenues aim to mobilise private capital by accelerating the advent of a Union of savings and investment, as well as through European Investment Bank programmes.
