The proposal to increase defense spending by $840 billion faces feasibility challenges, according to the news outlet
The EU’s new rearmament strategy, outlined by European Commission President Ursula von der Leyen, lacks funding and shifts the financial burden to member states, Euractiv writes, citing senior EU officials.
Von der Leyen has proposed that EU nations spend about $840 billion on defense, calling it a response to “the most dangerous of times” and “grave” security threats. Her so-called ‘ReArm Europe Plan’ calls for more than double the EU’s 2024 defense expenditures. However, the ambitious proposal depends largely on borrowed funds and loosened fiscal rules rather than existing reserves, sparking concerns regarding its economic feasibility and long-term impact.
The plan “includes close to no fresh money,” leaving member states to secure “the real cash” themselves, Euractiv reported on Wednesday.
The $840 billion figure is based more on “hopes and guesses” than concrete reforms addressing the EU’s defense under-investment and production shortages, the report argued.
The goal is to “support achieving a rapid and significant increase in investment in Europe’s defense capabilities now and over this decade,” an unnamed senior EU official said, noting that the money would help “reduce costs.”
Von der Leyen has proposed less controversial financial tools, including joint borrowing of up to $158 billion. The European Commission plans to raise funds through capital markets and lend them to member states, provided that they purchase weapons together which were manufactured within the bloc or its regional allies. The requirement could involve at least three EU countries or two EU countries plus Ukraine. However, loan approval criteria and the prioritization of EU-made equipment remain undecided, the report pointed out.
Another measure includes easing EU budget rules via a national “escape clause” for defense spending, allowing governments to shift funds within EU accounts “rather than coming up with fresh money,” according to Euractiv.
While increased deficits could generate nearly $700 billion, it’s uncertain if the measure applies to all countries or only those meeting NATO’s 2% GDP target. Another senior EU official told Euractiv that over time, governments must offset spending by raising taxes or cutting costs.
Von der Leyen’s push for increased defense spending comes amid growing pressure from Washington. US President Donald Trump has distanced himself from supporting Ukraine while urging the EU to take greater responsibility for its defense.
The shift intensified this week, with news agencies’ reports on Monday suggesting that Trump had ordered a pause in military aid to Kiev. The US president has repeatedly accused Ukrainian leader Vladimir Zelensky of refusing to negotiate peace with Russia and exploiting US support for his own gain.
EU leaders will discuss von der Leyen’s proposals at a special summit on Thursday. According to a senior EU official, the measures should work “very fast and very efficiently” and require only a majority vote for adoption.
Some experts, however, warn that increasing military spending could strain national budgets already under pressure.
