BRUSSELS, March 5 (Alliance News): The European Commission has proposed €150 billion ($157.76 billion) in joint EU borrowing to lend to member states for defence as part of an overall €800 billion financing initiative aimed at strengthening Europe’s military capabilities.
With US President Donald Trump’s potential return to power raising concerns over reliance on Washington, European leaders face mounting pressure to increase defence spending. The joint borrowing would fund key areas such as missile defence, artillery systems, drones, cyber security, and military mobility, Commission President Ursula von der Leyen said.
The proposal, set to be discussed at a special EU summit on Thursday, also calls for exempting defence spending from EU budgetary limits. Additionally, cohesion funds, usually allocated for economic development, could now be used for military projects.
“Europe is ready to assume its responsibilities,” von der Leyen stated, adding that a coordinated European defence strategy could mobilize up to €800 billion.
The plan has already impacted markets, with the Stoxx Europe Aerospace and Defence index rising on the news. Meanwhile, Trump has urged NATO members to spend 5% of GDP on defence, a target no member has yet met. His recent decision to pause military aid to Ukraine has further underscored Europe’s need for a self-reliant security framework.
