Brussels
\nThe European Commission proposed on Tuesday new joint European Union borrowing of 150 billion euros ($157.76 billion) to lend to EU governments for defence as part of an overall 800 billion financing effort to boost Europe\u2019s defence capabilities.
\nEuropean leaders are under huge pressure to increase defence spending as US President Donald Trump\u2019s return to power has delivered a rude wake-up call that they cannot blindly rely on Washington.
\nThe joint borrowing would go towards building pan-European capability domains like air and missile defence, artillery systems, missiles and ammunition, drones and anti-drone systems or to address other needs from cyber to military mobility, the Commission said.
\n\u201cIt will help Member States to pool demand and to buy together. This will reduce costs, reduce fragmentation increase interoperability and strengthen our defence industrial base,\u201d Commission President Ursula von der Leyen said.
\nVon der Leyen did not give a detailed timeframe, but said spending needed to be increased \u201curgently now but also over a longer period of time over this decade.\u201d
\nEU leaders will discuss the proposal at a special summit devoted to defence spending on Thursday.
\nThe Commission also proposed that defence spending be exempt from limits imposed by EU rules on government spending.
\n\u201cIf Member Sates would increase their defence spending by 1.5% of GDP on average this could create fiscal space of close to 650 billion euros,\u201d von der Leyen said.
\nIn addition, the Commission proposed that money countries receive from the EU\u2019s so-called cohesion funds\u2013designed to equalise standards of living across Europe\u2013could also be used for defence purposes.
\nAll these elements could provide up to 800 billion euros for EU governments to spend on defence projects.
\n\u201cEurope is ready to assume its responsibilities. Europe could mobilize close to 800 billion euros for a safe and resilient Europe. We will continue working closely with our partners in NATO. This is a moment for Europe. And we are ready to step up,\u201d von der Leyen said.
\nThe Stoxx Europe Aerospace and Defence index rose on the news.
\nTrump, who has raised European doubts about the US commitment to the NATO security alliance, has said NATO\u2019s European members should spend 5% of GDP on defence \u2014 a figure no NATO member including the US currently reaches.
\nHe has also paused military aid to Ukraine following his clash with Ukrainian President Volodymyr Zelenskiy last week, leaving Europe trying to figure out how to react.<\/p>\n","protected":false},"excerpt":{"rendered":"
Brussels The European Commission proposed on Tuesday new joint European Union borrowing of 150 billion euros ($157.76 billion) to lend to EU governments for defence as part of an overall 800 billion financing effort to boost Europe\u2019s defence capabilities. European leaders are under huge pressure to increase defence spending as US President Donald Trump\u2019s return […]<\/p>\n","protected":false},"author":2,"featured_media":465239,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-465216","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\n