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President of the European Commission Ursula von der Leyen has proposed a triple legislative mechanism to gensis €800 billion in European military spending as part of a plan called ReArm Europe.
“A new era is upon us,” von der Leyen wrote in a letter presenting the plan to EU leaders. “Europe faces a clear and present danger on a scale that none of us has seen in our adult lifetime”.
The threat should be interpreted as the rumored withdrawal of US spending on European defense and security, as a battle-weary Russian military unable even now after 3 years to take the whole of the Donbas region of Eastern Ukraine, couldn’t possibly threaten Western Europe.
Though no such withdrawal has been proposed, throughout its negotiations between Ukraine and Russia, the Trump Adminstration has remained adamant that Ukraine’s security is a problem not for America, but for Europe, which has been underparticipating in their NATO defense commitments for years.
In the letter, von der Leyen suggested three different funding mechanisms, several of which are de facto invitations for massive debt creation and deficit spending between the bloc’s main members.
The first mechanism would be suspending existing EU regulations on deficit spending “to allow member states to ramp up defense spending” according to Le Monde.
“This will allow member states to significantly increase their defense expenditures without triggering the excessive deficit procedure,” she said.
The second would be some kind of debt “instrument” that will mobalize €150 billion of loans to member states for defense investment.
“This is basically about spending better – and spending together,” said von der Leyen. “We are talking about pan-European capability domains – for example: air and missile defense, artillery systems, missiles and ammunition, drones and anti-drone systems. With this equipment, member states can massively step up their support to Ukraine. So, immediate military equipment for Ukraine”.
Defecit Defense
Following last Friday’s fiery disagreement between presidents Zelenskyy and Donald Trump in the Oval Office, the Ukrainian president was embraced by European heads of state, with the UK, German, Slovenian, and French leaders all more or less announcing they stand by Ukraine.
“On Ukraine, Allies are preparing billions more in aid + contributions to security guarantees,” NATO’s Secretary General Mark Rutte posted on X in the aftermath of the meeting.
Trump meanwhile announced a suspension of all military aid—even what is already in transit—to Ukraine, until further advances are made on peace terms. Though existing aid commitments reach into the hundreds of billions for civilian and military contributions, the former president Biden provided them in such a way as would see the aid be distributed over several years to evade seeking Congressional authority. Trump’s interruption would break this sensitive ratline of weapons and ammunition that have allowed the Ukrainian Defense Forces to remain in the fight.
Von der Leyen’s third funding mechanism would be a change to existing EU budget provisions “to direct more funds towards defense-related investments”. The changes would allow member states to re-purpose so-called “cohesion” funds, which are targeted at helping the development of poorer European countries. This money would then be available for defense spending.
The last two areas of action would involve the EU’s lending arm, the European Investment Bank. There are current discussions to drop limits on lending to defense firms, like Germany’s Rheinmetall.
This was first reported by the Financial Times after the paper accessed a copy of a letter sent to the board of the EIB by 19 member states including Germany, France and Italy, as well as the Nordic and Baltic states, Belgium, the Netherlands, Spain, Luxembourg, Greece, Cyprus, Romania, Slovakia, Czechia, and Croatia. Poland is also supportive of the measure that would revise existing lending regulations to cover traditional defense industries like ammunition factories. Those policies allow for investment in dual-use items like drones, but not outright war material.
Any change to the bank’s lending policy needs a simple majority vote of its shareholders: the EU’s finance ministers, however, EIB president Nadia Calviño told reporters “we are not a defense ministry, we are Europe’s investment bank”. WaL
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PICTURED ABOVE: European Commission President Ursula von der Leyen in 2019. PC: CC 2.0. European Commission
