BRUSSELS — The EU is unleashing efforts to boost defense spending, including a new so-called instrument aimed at key weapons programs, loosening fiscal rules to allow countries to spend more and prodding banks to boost lending, European Commission President Ursula von der Leyen said on Tuesday.
“We should enable more targeted and efficient defense spending through a designated European instrument,” she told reporters, for the first time spelling out which capabilities should benefit from EU money and coordination under the instrument.
“The focus will be on European capability areas of European strategic interest like a European integrated air defense, deep- and precision strike capabilities, drones and UAVs, missiles and ammunition or of course the military use of AI,” she said.
The Commission president’s comments come amid a scramble from European capitals to boost their defense capabilities and forge a cohesive response to the threat posed by Russia as worries grow that U.S. President Donald Trump is cozying up to the Kremlin and preparing to abandon Ukraine and Europe.
European leaders will convene in London on March 2 and Brussels on March 6 to discuss joint plans on defense and security.
Setting out priorities
It’s part of a wider effort to dramatically boost Europe’s defense production.
Defense Commissioner Andrius Kubilius is looking to come up with an EU industry output plan to help EU countries organize and prioritize weapons production.
On March 19, the European Commission will present a policy paper on the future of European defense, which is expected to include a list of priorities for the joint development of military equipment, as well as financing options.
Capitals are currently pitching their own priorities: Paris has listed seven areas including space, air defense, military AI and deep-strike capabilities; the Netherlands proposed space, maritime domain awareness and air defense; and Poland and Baltic nations focused on ammunition, strengthening the eastern border and air defense, among others.
A key issue is how to find the cash for these initiatives.
Von der Leyen did not set out whether the new instrument should be financed by EU common debt — an idea unpopular among fiscally conservative Northern European states — by redeploying money from other EU funds, or by contributions from member countries.
These questions will loom large over the March 6 meeting of EU leaders, where they are also expected to discuss a new military aid package to Ukraine.
Debts and deficits
Besides endorsing a brand new instrument, von der Leyen reiterated her intention to make it easier for countries to boost defense spending without falling afoul of the EU’s rules that limit national debt and deficits.
She would trigger the EU’s national escape clause, under which military expenditures would not be counted toward the bloc’s fiscal limits.
This clause can be activated when “exceptional circumstances outside the control of the Member State lead to a major impact on the public finances” of a country, according to EU spending rules that were revamped last year.
The Commission president added that this mechanism will be applied “in a controlled and conditional way” to avert rampant spending by highly indebted countries.
Commission officials support a German proposal to limit the emergency clause to countries spending more than 2 percent of their GDP on defense. That’s angering states that fall short of this target, including Italy and Spain.
Finally, the Commission president advocated a bigger role from institutions like the European Investment Bank as well as private banks in boosting lending to the EU’s defense sector — a well-known ask from the EU’s executive branch, as well as some capitals.
Earlier Tuesday, Polish Prime Minister Donald Tusk said after meeting with European Council President António Costa in Warsaw that he hoped “that greater mobilization of Europe — both the member states and Europe as a whole — in terms of financing defense and security will finally become such an unequivocal fact.”
“[Costa] said that the Commission is on the right track, preparing a certain package. We will find out the details on March 6,” he added.
Camille Gijs contributed reporting.
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