If there is one silver lining to Donald Trump’s Oval Office bust-up with Volodymyr Zelensky last Friday, it is that Europe is finally getting serious on rearmament and defence. Or is it?
On Tuesday, Ursula von der Leyen, president of the European Commission (EC), announced a package of measures designed to encourage EU member states to up their defence spending. If they make full use of the new proposals, von der Leyen said, it would amount to an increase of up to €800 billion (£661 billion) spent on defence across the bloc. Announcing the package, she declared: ‘We are in an era of rearmament. And Europe is ready to massively boost its defence spending.’
Europeans have had months – if not years – to prepare a plan for exactly this eventuality
Setting out what she has called the ‘ReArm Europe plan’, von der Leyen declared that the available funds could be used by EU member states to buy ‘air and missile defence, artillery systems, missiles and ammunition drones and anti-drone systems’, as well as ‘address other needs from cyber to military mobility’. Countries will be able to use the funds to rearm their own militaries, as well as continue to supply Ukraine.
But while an increase of €800 billion in Europe’s defence spending sounds like the ‘massive’ – and frankly long overdue – cash injection for the continent’s hollowed out armed forces von der Leyen suggests it is, digging into the details, all is not quite what it seems.
Under the EC chief’s plan, just €150 billion (£124 billion) will be made directly available for the EU’s 27 members to borrow – on condition of repayment – over five years. The rest of the €800 billion won’t be offered up through loans. Instead the Commission plans to trigger a mechanism which will allow individual states to increase their government deficits by an average of 1.5 per cent of GDP – over the next four years, this would, von der Leyen said, amount to the equivalent of €650 billion (£538 billion).
In reality, then, von der Leyen’s €800 billion defence package amounts to an average of only around €5.5 billion (£4.5 billion) in available funding for each member state across five years, with it being left up to individual countries to borrow the remaining €24 billion (£20 billion) or so available to them on their own books. Add to this the fact that von der Leyen’s announcement includes no obligation for EU members to actually make use of the funding, and it quickly appears that the boost to the bloc’s defence spending will in all probability fall short of the €800 billion she suggests. Exactly how any of this will be funded by the EU is also something von der Leyen failed to clarify.
European leaders will still need to approve the ReArm Europe plan, and are expected to discuss it at a summit in Brussels on Thursday. Finance ministers from the bloc’s member states will also likely discuss it during meetings scheduled for next week. As such, the proposal may well still change – and be hashed out in more detail.
Of course, von der Leyen’s ReArm plan is only meant to supplement Europe’s arms race – not substitute it. On Sunday, Prime Minister Keir Starmer hosted a summit at Lancaster House in London, gathering together a number of European leaders to discuss creating a plan to secure peace for Ukraine and upping defence spending. Following the meeting, Nato chief Mark Rutte revealed he had heard a number of ‘new announcements’ from around the table from countries pledging to ramp up defence spending‘.
As Rutte hinted, there has been a small flurry of announcements from the continent since then on how Europe plans to increase its defence spending. On Sunday, French President Emmanuel Macron said his aim was to raise France’s spending to between 3 and 3.5 per cent of GDP – a boost of approximately €27 billion (£22.3) – although he didn’t specify a timeline. Italy’s Georgia Meloni has also signalled that she is ready to increase spending by an approximate €20 billion (£16.5 billion) to hit 2.5 per cent of GDP – although again without a timeline.
News also emerged yesterday that Friedrich Merz – the winner of Germany’s federal election last month and the man most likely to become the country’s next chancellor – has started discussions with his likely coalition partners, the SPD, on how to up defence spending. Together they plan to bring a ‘double bazooka’ bill to the Bundestag next week that would see the country’s defence spending exempted from the constitutional debt brake. Merz reportedly wants to raise defence spending by around €200 billion (£165 billion).
Poland, meanwhile, announced last month that it aims to spend 4.7 per cent of GDP on defence this year – reaching €30 billion (£25 billion). This would make it the largest defence budget by proportion of GDP of any members of the Nato alliance.
Britain, too, is falling into lockstep with Europe on rearmament. Starmer himself announced last week that Britain would be increasing its defence spending by 0.2 per cent of GDP – equivalent to just over £13 billion – over the next two years. On Sunday, Chancellor Rachel Reeves also tweaked the parameters of the national wealth fund to allow the £27.8 billion it contains to be used on defence.
The fact remains that much of Europe is currently struggling to spend 2 per cent of GDP on domestic defences, let alone meet the demands by Trump for 5 per cent. Trump’s decision yesterday to temporarily pause military aid to Ukraine and America’s apparent growing alignment with Russia has created fresh urgency on the continent for how to deal with the quite real threat of further aggression from Moscow – whether in Ukraine or closer to home.
Europeans have had months – if not years – to prepare a plan for exactly this eventuality. The alarm bells for the continent’s failure to keep their armies up to scratch have been ringing for years – not least during von der Leyen’s own tenure as German defence minister between 2013 and 2019. The spending commitments made by its leaders over the past days and weeks pale are dwarfed by the $883 billion (£691 billion) the US has earmarked for defence this year alone.
Von der Leyen’s ReArm Europe plan is a welcome and necessary start for ensuring the continent’s security. But to plug the gaps in a number of armed forces caused by 20 years of underinvestment and neglect, let alone plan for the future, this won’t touch the sides.
Europe needs to spend more on defence and fast – particularly if they want to entertain even the slightest notion of helping to guarantee Ukraine’s sovereignty. Tough decisions on how to fund this lie ahead for its leaders. Europe’s arms race is off to a feeble start.
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