The EU is preparing its biggest security initiative since the Cold War: Bloomberg has learned three elements of the plan

The European Union is developing the largest regional security initiative since the Cold War. The plan includes hundreds of billions of euros for defense and consists of three key funding elements, Bloomberg reports, according to UNN .

Details

“Donald Trump has made it clear that Europe needs to defend itself, and the continent's response to U.S. threats of withdrawal is beginning to take shape. In the largest regional security initiative since the Cold War, the European Union is seeking hundreds of billions of euros in additional defense funding, according to people familiar with the discussions,” the newspaper writes.

Following the UK's dramatic increase in military spending, the figures include changes in fiscal rules to free up national resources, potential joint funding and reallocation of existing funds, said the people, who asked not to be identified because the talks are ongoing and sensitive.

In addition to EU initiatives, Germany is seeking to accelerate the creation of a debt-financed defense fund of up to €200 billion ($210 billion).

“At this once-in-a-generation moment, we need a 'sense of urgency' and a strategic plan to rearm Europe,” European Commission President Ursula von der Leyen said this week in Brussels after a trip to Ukraine.

“Despite its intentions, Europe faces two difficult problems: its defense industry is inadequate and unprepared for rapid rearmament; and its stockpiles have been virtually depleted by support for Ukraine. Despite the U.S. withdrawal, the bloc has pledged to continue supporting Kyiv and is working on a plan to provide about 20 billion euros in additional military support,” the newspaper writes.

“The new security architecture will begin to take shape at an emergency meeting of leaders on March 6,” the newspaper notes. Then, on March 19, European Commissioner for Defense Andrius Kubilius and EU Chief Diplomat Kaja Kallas are supposed to present a new defense strategy. Until then, feverish negotiations are underway to expand the bloc's resources.

Three elements of von der Leyen's defense plan

“Von der Leyen's defense plan will consist of three elements,” the newspaper points out. All are complex, and it is unclear to what extent they will be implemented, people say. 

The first part aims to allow member states to spend more by relaxing fiscal rules. According to some officials, this could help mobilize at least 160 billion euros.

The talks are centered on excluding defense spending from deficit calculations and could amount to between 1% and 2% of national GDP in two to four years, according to the people. Details need to be ironed out, including what counts as defense spending, how long the exemption would last, and whether meeting NATO's 2% target would be a factor.

The second part is to address the issue of spending at the EU level through a new common instrument. This money will be mainly used to invest in joint projects in areas such as air defense, long-range strike capabilities, missiles, drones, and military-grade artificial intelligence.

Some senior EU officials and member states have called for the possibility of joint borrowing, but this idea is always controversial and divides the bloc.

The third part is to ease investment restrictions for the European Investment Bank. Currently, it is allowed to invest only in dual-use goods. The change will also open the way for additional financing of private banks.

What else is being discussed

In addition to these three components, von der Leyen floated the idea in closed-door discussions of possibly reusing unspent EU funds, including money raised for recovery from the COVID pandemic, the people said.

According to the European Commission, only 6.4% of the 392 billion euros of so-called cohesion funds have been disbursed. This is one of the largest pools of EU money available, and while the money can finance some defense projects, if they contribute to regional development, the criteria can be expanded.

In addition, there are 93 billion euros of unclaimed cheap loans from the pandemic recovery fund, which, according to EU officials, can be used for defense. Some of the requested funds can also be redistributed, but there is not much time, as the deadline for spending on recovery is August 2026.

Another idea that has been put forward is to use the European Stability Mechanism, a €500 billion eurozone rescue fund. But this option remains complicated, as it would exclude countries outside the common currency area, such as Poland, and would be closed to non-EU allied countries.

Given the complexity involved in any EU decisions, countries including Poland have suggested cooperating outside the bloc through a special fund or bank. A “coalition of the willing” could act more quickly and could be open to non-EU countries such as the UK and Norway, the people said.

“We need innovative financing to have much more joint investment as Europeans,” French President Emmanuel Macron said in an interview on Fox News after his meeting with Trump. - “Why? Because we have to take on our part of the burden and we have to invest much more in our own security.

Нагадаємо: The Telegraph: Франція може розгорнути в Німеччині свої винищувачі з ядерною зброєю.