EU Proposes €150 Billion Defense Fund Amid Growing Security Concerns

BRUSSELS, Belgium – On March 4, the European Commission unveiled a plan proposing new joint borrowing of €150 billion ($157.76 billion) for EU governments aimed at enhancing Europe’s defense capabilities. This funding is part of a broader €800 billion initiative aimed at addressing urgent security challenges facing the continent.

European Commission President Ursula von der Leyen emphasized the necessity of increasing defense spending, stating, “Europe is ready to significantly increase its defense spending to respond both to the short-term need to act and support Ukraine and to address the longer-term need to take greater responsibility for our own security.”

The proposed funds would be allocated toward various defense projects, including air and missile defense systems, artillery, munitions, and capabilities in cyber security and military mobility. The announcement comes in light of shifts in U.S. foreign policy and ongoing concerns about security within NATO.

“This will help Member States pool demand and buy together. It will cut costs, reduce fragmentation, increase interoperability, and strengthen our defense industrial base,” von der Leyen added. While a specific timeline for implementation was not provided, von der Leyen noted that the increased spending would be urgently needed “now and over the next decade.”

The proposed fund will also allow member states to access EU cohesion funds, which are typically aimed at improving living standards, for defense purposes. This mechanism could unlock an additional €650 billion if EU countries raise their defense spending by 1.5 percent of their gross domestic product.

As part of the discussion ahead of a special EU meeting focused on defense spending scheduled for Thursday, von der Leyen highlighted the importance of working closely with NATO partners. “Europe is ready to take up its responsibilities. Europe could mobilize almost €800 billion for a safe and resilient Europe,” she stated.

The European defense proposal comes amidst increased pressure on EU nations to bolster their military budgets, particularly in light of the conflict in Ukraine. Former U.S. President Donald Trump has articulated that NATO members should spend 5 percent of their GDP on defense, a target not met by the U.S. or any NATO country at present. This has led to heightened discussions about European states taking greater financial responsibility for their own security.

EU leaders will convene this week to deliberate on these proposals and plan the future contour of European defense spending amid shifting global dynamics.