EU's strategic pitch: €500 billion boost for defence and Ukraine
The European Commission plans to propose methods for financing EU defence and further supporting Ukraine. It plans to allocate up to 500 billion euros for this endeavour. Decisions will be made after the German elections.
The European Union is gearing up for significant investments in defence and support for Ukraine. The European Commission intends to present financing proposals for these initiatives in March.
The financing decisions will depend on the outcome of Germany's elections. So far, Berlin has opposed joint borrowing for defence purposes, but a "European financial package" might become feasible after the elections.
Brussels' plan to raise funds: several possibilities
Brussels is considering utilising 93 billion euros from unused Recovery Fund loans.
The European Commission is also contemplating reallocations within the current EU budget. EC spokesperson Maciej Berestecki mentioned redirecting funds from the cohesion policy to defence. Investments could focus on dual-use infrastructure.
Another option under consideration is creating an intergovernmental financial instrument for defence. Minister Radosław Sikorski discussed establishing a new rearmament bank modelled on the European Bank for Reconstruction and Development.
The head of the EC, Ursula von der Leyen, announced the relaxation of fiscal rules. This will enable EU countries to raise defence budgets without incurring penalties for excessive deficits, a crucial step given the increasing security expenditures.
