European Commission President Ursula von der Leyen arrives on March 4, 2025 to hold a press conference on the “defense package” at the EU Commission headquarters in Brussels (Photo: Nicholas Tucat / AFP)
Nicholas Tucat | AFP | Getty Images
European Commission President Ursula von der Leyen said on Tuesday that a new plan to increase defence spending could mobilize 800 billion euros ($841 billion).
“Europe is ready to significantly increase defence spending, both to address the short-term urgency to support Ukraine, but also to address the long-term needs of taking on more responsibility for our own European security,” she said at a press conference.
Europe is in an “era of re-contracts,” she pointed out.
Von Der Leyen said he wrote to European leaders ahead of the Council of Europe meeting later this week to propose a “Rearm Europe Plan,” designed to allow EU countries to increase their defensive capabilities spending. She added that this is necessary “not only urgently now, but despite the long period.”
“Europe Europe could mobilise nearly 800 billion euros for a safe and resilient Europe,” she said. “This is a moment for Europe, and we are ready to step up.”
The plan includes a 150 billion euro loan that member states can access to for investment by von der Leyen, known as the “Pan-European Capacity Domain.”
“To address other needs, from cyber to military mobility, such as air and missile defense, gun systems, missile and ammunition drones, anti-drone systems, and more,” she added.
In a letter sent to EU leaders and seen in CNBC, von der Leyen said the new lending instruments will be supported by the EU budget.
Also, Reim Europe’s plan will allow EU member states to use public funds for defense at the national level by activating the EU stability and state escape clauses of the growth agreement. The move, first announced at the Munich Security Conference last month, gives countries more flexibility in how they spend their money.
Von Der Leyen pointed out options such as changing the EU budget and mobilizing civil capital to increase defence spending.
The 27 EU leaders will meet in Brussels on Thursday to discuss the proposals of Rearm Europe at a conference dedicated to the defense and support of Ukraine.
Trump repeatedly pushes European countries and other NATO allies, increasing defense spending by 2% of gross domestic product each year exceeding current NATO targets.
Many countries have struggled to meet even this goal, and have expressed concern about increasing spending that approaches 5% of Trump’s preference. Others, like Poland, are seeking a significant increase in spending, especially given Russia’s invasion of Ukraine.
The way the Trump administration responded to the ongoing conflict in recent weeks, including spats with Ukrainian President Voldy Mie Zelensky at the White House last week, and reports that the US has halted military aid to Ukraine — reports increasing pressure on Europe’s actions.
German Foreign Minister Annalena Bearbock said on Tuesday that von der Leyen’s proposal was a “important first step.” Post X from social media platform X translated by CNBC. She said two things were needed to achieve “peace through strength.” It is a “quantum leap” to enhance defense and additional military and financial support for Ukraine.
– CNBC’s Silvia Amaro contributed to this report.
