European Commission President Ursula von der Leyen presented on March 4 the ReArm Europe plan aimed at strengthening the defense capabilities of the continent's countries.
The announcement comes amid seismic geopolitical shifts as U.S. President Donald Trump upends Washington's long-standing policy on Ukraine and Russia while casting doubt on his commitments to transatlantic security.
"The real question in front of us is whether Europe is prepared to act as decisively as the situation dictates, and whether Europe is ready and able to act with speed and with the ambition that is needed," von der Leyen said.
The plan consists of five points designed to increase defense spending, as well as defense procurement and production.
The first step is to unleash the use of public funding for defense at the national level. The European Commission is proposing to activate the National Escape Clause of the Stability and Growth Pact, which would allow member states to significantly increase their defense spending without triggering the excessive deficit procedure.
If member states would increase their defense spending by 1.5 percent of GDP on average, this could create close to 650 billion euros ($684 billion) over a period of four years, according to von der Leyen.
The second point is a new instrument that will provide 150 billion euros ($158 billion) of loans to member states for defense investments "to spend better and spend together."
"We're talking about pan-European capabilities domains like, for example, air and missile defense, the artillery systems, missiles and ammunition, drones and anti-drone systems, but also to address other needs from cyber to military mobility, for example," von der Leyen said.
According to von der Leyen, with the new equipment, member states can significantly increase their support for Ukraine and provide military aid for it immediately.
The third point of the plan is aimed at increasing investment in the defense sector. The European Union will therefore introduce additional opportunities and incentives for member states to decide whether they want to use cohesion policy programs to increase defense spending.
The last two areas of action consider mobilizing private capital by accelerating the Savings and Investment Union and through the European Investment Bank, von der Leyen said.
The ReArm Europe plan could mobilize close to 800 billion euros ($842 billion) of defense expenditures for a "safe and resilient Europe," the president added.
"Europe is ready to assume its responsibilities," she said. "This is a moment for Europe and we are ready to step up."
Olena Goncharova
(Updated: )
