EU chief unveils €800bn plan to ‘rearm’ Europe
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‘We are ready to step up’ says Ursula von der Leyen after US suspends military aid to Ukraine

Ursula von der Leyen said on Tuesday the 27-member bloc would propose giving member states more fiscal space for defence investments, as well as €150bn in loans for those investments, and would also aim to mobilise private capital.

Presenting the “ReArm Europe” package in Brussels, von der Leyen said: “This is a moment for , and we are ready to step up.” The proposals “could mobilise close to €800bn of defence expenditures for a safe and resilient Europe”, she added.

Later on Tuesday, the prospective partners in Germany’s next government said they would seek to loosen the nation’s debt rules to allow for higher defence spending.

Friedrich Merz, the conservative leader who is trying to put together a coalition government with the centre-left Social Democrats, said the two sides would propose exempting spending of more than 1% of gross domestic product on defence from rules that limit the government’s ability to borrow money, known as the “debt brake”.

The announcements in Berlin and Brussels came after  all US military aid to Ukraine, blocking billions of dollars’ worth of ammunition, vehicles and other vital equipment as Donald Trump piles pressure on Kyiv to agree a peace deal with Russia.

The US president’s announcement came after  between Trump and his Ukrainian counterpart, Volodymyr Zelenskyy, and a crisis meeting in London on Sunday at which .

Trump’s direct approach to  on ending the Ukraine war has thrown Ukraine’s future into question and left Europe contemplating the stark prospect of the US withdrawing longer-term support from Ukraine and from its European allies.

EU leaders are due to discuss the proposals at a special summit devoted to defence spending in Brussels on Thursday – although diplomats have said immediate decisions beyond strong commitments were unlikely.

“A new era is upon us,” the commission president wrote to EU leaders. “Europe faces a clear and present danger on a scale that none of us has seen in our adult lifetime … We are living in the most momentous and dangerous of times.”

The commission’s plan includes €150bn of new joint EU borrowing that would be lent to EU governments to fund pan-European capabilities in areas such as air and missile defence, artillery systems, missiles, ammunition, drones and other needs.

“It 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,” von der Leyen said.

“With this equipment, member states can massively step up their support to Ukraine. So, immediate military equipment for Ukraine,” she added.

The commission would also propose loosening the fiscal constraints the EU puts on government spending to “allow member states to significantly increase their defence expenditures” without triggering punishing budget deficit rules, she said.

“If member states increase their defence spending by 1.5% of GDP on average, this could create fiscal space of close to €650bn over a period of four years,” von der Leyen said. Defence spending in many EU states is below the Nato target of 2% of GDP.



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The package also includes action by the European Investment Bank – which EU member states want to drop limits on lending to defence firms – and on a savings and investments union to help European companies access capital.

France’s finance minister, Eric Lombard, said on Tuesday that his country would have to spend “faster and harder” on defence even if it meant it would have to make savings elsewhere, though the welfare system would largely remain intact.

Lombard rejected seizing Russian assets to fund European military spending, saying Paris’s position was that “these Russian assets … belong notably to the Russian central bank” and seizing them “would be contrary to international agreements”.

The European Commission insisted that the US remained “an ally”, saying that it was “not up to us to comment on decisions or announcements that are made on the other side of the Atlantic”.

Deputy chief spokesperson Stefan de Keersmaecker told reporters: “We know that it’s important to support Ukraine also in its defence – also to make sure that it’s in a better negotiating place.”
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