By New York Post (World News) | Created at 2025-03-04 23:15:09 | Updated at 2025-03-05 03:01:14
3 hours ago
European leaders have proposed more than $150 billion in emergency borrowing to help beef up their languid armies — the latest sign that leaders across the pond are waking up to President Trump’s “America First” diplomacy.
“We are living in the most momentous and dangerous of times. We are in an era of rearmament. And Europe is ready to massively boost its defense spending,” European Commission President Ursula von der Leyen said on Tuesday, ahead of a special defense summit being held by European Union leaders on Thursday.
The proposed five-point plan, dubbed “ReArm Europe,” would see 150 billion euro ($157.6 billion) fund would go toward European defense priorities such as air defense, drones and missiles, as von der Leyen said up to 800 billion euros ($842.3 billion) could be mobilized.
“If member states would increase their defense spending by 1.5% of GDP on average this could create fiscal space of close to [$690 billion] over four years,” von der Leyen said.
Von der Leyen first suggested the rearmament plan following a closed-door meeting on Ukraine in London on Sunday.
But the new spending, over five years, still pales in comparison to the US, which has earmarked $883 billion for defense this year alone.
HOW WOULD IT WORK
The five-point plan would see the suspension of strict budget controls, allowing member states to ramp up their defense expenditures without triggering the EU’s rules deficit spending, von der Leyen said.
The loans will be provided by the Commission to EU governments for defense under the plan.
A third part of the proposal involves “using the power of the EU budget,” to direct more short-term funds towards “defense-related investments,” von der Leyen said.
TRUMP WARNING
It comes a day after Donald Trump’s dramatic pausing of military aid to Ukraine.
Trump’s diplomatic shift has exposed Europe as still being underprepared to defend itself three years after the Russian invasion.
Trump has accused European countries of failing to spend enough on their own defense and relying instead on the US through the NATO alliance.
On Friday, Trump and J.D. Vance got into a shouting match with Zelensky in the Oval Office, leading to the Ukrainian President storming out of the White House and canceling a planned press conference.
Europe’s leaders now insist they are rapidly boosting defense spending, however, much of the Commission package focuses on encouraging the EU’s member states to spend more on defense and repurposing existing funds rather than providing new EU money.
The package has no proposal for joint borrowing for grants — rather than loans — for defense projects, which had been supported by many countries such as France and the Baltic states of Estonia, Latvia, and Lithuania.
Countries “must go faster and harder” on defense spending, France’s Finance Minister Eric Lombard said on Tuesday.
Crucially, the move was opposed by the Netherlands and Germany, where the package was welcomed as an “important first step” on Tuesday by German Foreign Minister Annalena Baerbock.
The 27 EU member nations spent a total of 326 billion euros on defense in 2024, around 1.9% of GDP, according to the EU’s European Defense Agency.
Von der Leyen’s plan is similar to how the EU raised money for a Covid recovery fund, and could even see the rechanneling of around $95 billion in unclaimed Covid loans into defense, Politico reports.
However, that idea was shot down by the European Commission.
The EU’s decision to pump money into defense spending represents a drastic break from its past funding approaches.
Traditionally, the EU has used money to fund roads, subsidize farmers, and establish cross-border cultural projects.
It has also been quick to distance itself in the past from any talks of a joined-up military strategy, which has raised fears of a so-called “United States of Europe.”
