Brussels [Belgium], March 5 : European Union (EU) leaders will gather in Brussels on Thursday for a summit which could see member states mobilise up to 800 billion euros to 'ReArm Europe' as proposed by European Commission President Ursula von der Leyen to ramp up the defence spending, Euro News reported.
The summit will see deliberations on defence and Ukraine, as per Euro News on Tuesday.
As per the Euro News, Ursula von der Leyen proposed a Rearm Europe Plan, which she said could see member states mobilise up to 800 billion euros to finance a massive ramp-up in defence spending. The decision comes hours after Washington suspended all military aid to Ukraine, putting pressure on the bloc to increase its own assistance.
"We are in an era of re-armament, and Europe is ready to massively boost its defence spending, both to respond to the short-term urgency to act and to support Ukraine, but also to address the long-term need to take on more responsibility for our own European security," Euro News reported quoting the European Commission president.
As per Euro News, Von der Leyen outlined five measures in a letter to EU leaders ahead of the summit on Thursday. This includes a "new instrument" to provide 150 billion Euros in loans to member states to finance joint defence investments in pan-European capabilities, including air and missile defence, artillery systems, missiles and ammunition, drones, and anti-drone systems.
However, Von der Leyen did not provide details on how the money would be raised and if the roughly 90 billion Euros in unused money from the post-COVID recovery fund would form part of it.
The issuance of 'Eurobonds' to fund the bloc's defence needs has so far been vehemently opposed by several so-called 'frugal' member states, the Euro news reported.
The new instrument, von der Leyen wrote in her letter to leaders, would be established under Article 122 of the Treaty of the EU, which allows the bloc to deliver financial assistance to a member state facing "severe difficulties caused by natural disasters or exceptional occurrences beyond its control" without approval from the European parliament.
Notably, the Commission previously used this article during the COVID-19 pandemic to set up the 100 billion euros SURE instrument for which it turned to the markets. It was also used to roll out emergency measures to shield European citizens and businesses from the worst effects of the energy crisis.
Other measures from the defence package include the activation of the national escape clause of the Stability and Growth Pact is the other key measure from von der Leyen's defence package.
This would enable member states to exclude defence spending from their national expenditures and thus not run the risk of falling foul of the bloc's fiscal policy which mandates that government deficit and debt must remain under 3 per cent and 60 per cent of GDP respectively, Euro News said.
The Commission chief claimed that if EU countries increase their defence spending by 1.5 per cent of GDP on average, 650 billion euros could be freed over the coming four years.
Euro news reported that the EU member states have ramped up their defence spending since Russia launched its full-scale invasion of Ukraine in 2022 but they spend unequally, with Poland spending 4.12 per cent of its GDP on defence last year, while Spain spent just 1.12 per cent.
As per Euro news, the negotiations are underway among NATO allies, which include 23 of the EU's member states, to raise the defence spending target from its current 2 per cent of GDP level. A decision is set to be announced at a summit in The Hague in late June.
The other three measures proposed by von der Leyen include allowing member states to make more ample use of cohesion policy programmes to increase defence spending, expanding the mandate of the European Investment Bank so it boosts financing of defence projects and accelerating the Savings and Investment Union to enable private banks to pour more money into the sector too.
Euro News reported that the summit in Brussels on Thursday would also expect to see Ukraine's President Volodymyr Zelenskyy attend it.
However, it also highlights the divisions among member states on Ukraine as both Hungary's Viktor Orban and Slovakia's Robert Fico have threatened to veto any call for increased military assistance to the war-torn country.