The new Trump administration’s recent political offensive targeted at the European Union, as well as its fairly ambiguous approach towards the question of the Russo-Ukrainian war, have led Brussels to initiate a desperate search for EU-based solutions within the sphere of security and defense.
Decision-making processes stretching over the past few months have undergone a sudden acceleration. On March 4, President of the European Commission, Ursula von der Layen, announced a brand new defense package plan with an aim to “Rearm Europe” by directing substantial amounts of funds to the European defense industry, as well as upcoming security projects held by the member states. However, is the new plan enough to revive the long-neglected security industry on the old continent?
In her speech, held 48 hours before the European Union’s 27 leaders met in Brussels for a crisis summit, von der Leyen laid out the basic assumptions of the new package. According to this testimony, a joint loan of €150 billion would be taken by all EU countries to boost their military spending over the next five years. Subsequent steps would entail increasing this spending by up to €800 billion by allowing national governments to allocate greater shares of their GDP to the military, without them facing the risk of being subjected to the EU’s excessive deficit procedure.
At a glance, the project looks like a pivotal shift in European security policy, as well as a U-turn in comparison to its former undertakings. Nonetheless, it includes significant loopholes which, if not overcome, may largely hinder the sole objective of the European Commission.
First of all, it is the very size of the package that builds skepticism among the promoters of European defense’s revival. Although it undeniably constitutes a large share of the current EU budget (worth €2 trillion over the period of 2021-2027), it is to be stretched over all 27 member states for as long as the upcoming five years, which effectively shrinks the amount of funds available yearly to each country. Thus, even if all beneficiaries surged their expenditure up to the additional 1.5% of GDP permitted by the new legislation, its overall worth would still be dwarfed by the annual military spending of the United States, now equal to $883 billion.
Another controversy arises in reference to the funds’ origin, as none of them comes in the form of a grant. Contrarily, the existence of most of the assets (up to €650 billion) depends on the goodwill of the national governments, and more precisely – on their willingness to expand their own military spending even if it means a simultaneous increase in national debt. Such a mechanism makes it hardly possible to achieve the announced target of €800 billion, as it would require substantial diplomatic efforts to convince countries such as Spain to double their expenditure (and debt percentage) only for the sake of a common European defense plan. The remaining €150 billion takes the form of a joint EU loan which, as with all endeavors of this sort, puts an additional burden on the member states’ budgets in decades to come.
Lastly, there exist serious concerns regarding the ways of management and distribution of the newly-acquired funds. Learning from the experience of the 2020 EU Recovery Fund initiative, various member states doubt the efficiency and legitimacy of the top-down management of EU funds by the Commission and call for more transparent ways of their distribution, which would involve national governments. According to them, it is vital that the funds be allocated in a manner that allows the recounstruction of the defense industries of the countries most in need, as well as to foster joint security projects such as the East Shield initiative (the latter being expressed in the EP resolution on the future of European defense 2025/2565 RSP).
Taking all these questions into account, it becomes obvious that the EU faces a critical test in its bid to rearm. While the proposed defense package marks a historic turn in European security policy, it still contains plenty of ambiguities that could potentially undermine its impact. What’s important is that the final blueprint has yet to be unveiled and accepted by the remaining institutions, until when its shape may significantly change and adapt to the member states’ requirements. Will Brussels find a way to turn ambition into action, or will bureaucratic hurdles and financial constraints stall its momentum? Until the full details emerge, the success of Europe’s defense revival remains uncertain – and could require far greater efforts than initially envisioned.
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