Welcome to Wider Europe, RFE/RL's newsletter focusing on the key issues concerning the European Union, NATO, and other institutions and their relationships with the Western Balkans and Europe's Eastern neighborhoods.
I'm RFE/RL Europe Editor Rikard Jozwiak, and this week I'm drilling down on one issue: defense and the EU.
The Briefing: Could The EU Become A Military Superpower?
Only two weeks after a European Union summit where the bloc's leaders pledged to spend billions on defense in a "watershed moment for Europe," they are returning to Brussels for another meeting on March 20-21. This time, the EU's leaders aim to solidify plans for strengthening Europe's defense autonomy amid ongoing doubts about the US commitment to protecting European nations and sustaining military support for Ukraine.
In the runup to the summit, the bloc's foreign ministers on March 17 talked about EU foreign policy chief Kaja Kallas's latest proposal to find money for Kyiv. And on March 19, the European Commission is set to unveil a white paper on the future of European defense. The paper is expected to come up with ideas on how to create a proper integrated European defense market and to flesh out the proposal, made in the European Commission's ReArm Europe plan, where the EU executive would generate up to 800 billion euros ($872 billion) for defense spending over the next four years.
As always in Brussels, there are doubts about how credible all this really is. Diplomats I have spoken to agree that it's a good first step, but, as one senior EU official told me, "The devil is always in the details, and there are plenty of devils here."
Looking closer, it does seem that the 800 billion figure is very ambitious with lots of big ifs. If -- and how quickly -- this proposal can be translated into new weapons and ammunition. And if any of those weapons will make it to Ukraine.
The facts are clear. The EU defense commissioner, Andrius Kubilius, noted in the European Parliament last week that Europe currently has a defense shortfall of at least 500 billion euros, and is lacking "thousands of tanks and armored vehicles."
European Union Commission President Ursula von der Leyen, also addressing the Strasbourg chamber, noted that, on average, EU countries contributed just short of 2 percent of gross domestic product (GDP) on defense. Washington is pushing for 5 percent, whereas NATO, according to sources within the military alliance, is toying with the idea of making 3.7 percent the official target at its official Hague summit in June.
Still, even if there is a substantial and rapid increase in defense spending, privately European diplomats say it could take a decade for Europe to carry out major military operations without US help. In Europe at the moment, intelligence, surveillance, target acquisition, and reconnaissance are almost all exclusively provided by the United States.
Rearming Europe?
ReArm Europe aims to address the EU's dependency on the United States by making EU nations increase their defense budgets. But will they? Of the 800 billion euros Von der Leyen is hoping to generate, 650 billion euros could be raised by relaxing defense spending regulations for EU member states over the next four years. This proposal would permit each member state to allocate an additional 1.5 percent of their GDP toward military expenditures. While this extra fiscal space is welcomed, few believe all capitals will use it.
The remaining 150 billion euros are a loan scheme secured against unused EU budget funds that 20 countries in the bloc, without triple-A credit ratings, can use. These loans should finance purchases from European defense producers, although it's not clear if all the components in such equipment need to be from EU countries, or if they could come from non-EU states such as Norway, Switzerland, and Turkey.
The problem here is that it is still a loan and many of the countries, notably in southern Europe, that need to increase their defense spending are heavily indebted. Also, some northern EU states are questioning the logic of this proposal, with the Dutch parliament recently and narrowly passing a nonbinding resolution to reject the ReArm Europe plan with the argument that it just gets the bloc into even more debt.
Then there is the third part of Von der Leyen's proposal, which would allow member states to use for defense the more than 300 billion euros funds left in the EU budget that normally would go to the bloc's poorer regions for infrastructure investment. The issue here, once again, is that it is voluntary. And that means that while it can't be blocked by Russia-friendly countries such as Hungary and Slovakia, as it doesn't require unanimity, some countries just won't bother, unless they're forced.
Bonds And Bazookas
Then there is Germany. The incoming chancellor, Friedrich Merz, has promised a real "spending bazooka," which includes a proposal that defense spending above 1 percent of GDP be exempted from the restrictions of Germany's constitutional debt brake. At the moment, the brake limits the structural budget deficit to 0.35 percent of GDP, except in emergencies.
This could unlock a German defense splurge of billions and is something that is generally welcomed in Brussels. Not quite so much in other European capitals, where there are fears Germany will spend most of it on its own domestic firms and create something of an unfair advantage.
This could, in turn, potentially trigger renewed calls from southern European states for Brussels to issue joint eurobonds, especially for defense investment. A similar thing was done to combat the Continent-wide recession after the coronavirus pandemic. Issuing joint bonds is anathema for most northerners, notably the Netherlands and Germany, but with Berlin clearly indicating that splurging on defense is a must, the proposal may eventually fly.
Military Mobility And The Danish Model
Eurobonds, or "defense bonds" as they are now being rebranded, are likely to make it into the European Commission's white paper on the future of European defense. But the things to really look out for here are some of the nitty-gritty proposals on military mobility. It may not seem like the most urgent thing, but EU officials are pointing out how important it is to be able to quickly move military equipment from one EU member state to another.
As it stands now, that wouldn't be easy. There are no harmonized rules across the bloc on, for example, moving military vehicles from one EU country to another in the event of an emergency. Initiatives such as strengthening bridges, railways, and roads to be able to carry heavier military loads are also suggested in the paper.
Another aspect likely to be included is the idea to integrate Ukraine's defense market into the EU market as the country slowly but steadily is moving toward membership of the union. This is seen by many European diplomats as a real win for the EU, as Ukraine now in fact boasts perhaps the Continent's most capable army and is "ahead of the curve compared to the rest of us on things like military drones," as one EU official familiar with the matter told me.
The document will, in this respect, also promote the so-called Danish model of supporting Ukraine. This approach involves EU member states directly procuring defense equipment manufactured in Ukraine or establishing joint ventures with Ukrainian defense companies. The idea of training Ukrainian soldiers in Ukraine and not only in the EU is also being put forward.
Helping Ukraine
But these plans are all for the future, and the question remains what Brussels can do for Ukraine right now. Kyiv has indicated that it may need as much as 33 billion euros of additional military support this year. With the United States possibly not contributing much to this, the EU needs to find most of that cash urgently.
EU foreign policy chief Kaja Kallas put forward a new plan to EU member states last week, seen by RFE/RL, which proposes a voluntary scheme that encourages participating states to "deliver military support to Ukraine in 2025 with a provisional value of at least 20 billion euros and potentially reaching 40 billion euros pending Ukrainian needs."
The text gives a deadline of April 30 for those participating to declare how they plan to meet their respective contributions and states that payments should be committed no later than June 30 to ensure deliveries by the end of this year.
The plan says this money should mainly go to large-caliber artillery ammunition, air-defense systems, missiles, drones, fighter jets, and training of Ukrainian troops. It should also support other contributions from member states, for example, sending troops to Ukraine in the event of a peace deal.
The paper still suggests countries should contribute based on their economic weight, meaning gross national income (GNI). This idea has previously angered France, which claims that trackers of military support for Ukraine such as the Kiel Institute for the World Economy are wrong, and that Paris does many things in secret and is also willing to send actual boots on the ground in Ukraine to safeguard a potential future cease-fire.
Looking Ahead
On March 19, the European Commission will come up with an action plan on how to help the steel industry in the European Union. This would normally not trigger too much interest, but now it's a different story as the United States on March 12 announced it was slapping a 25 percent tariff on steel (as well as aluminum) imports from the bloc. The bloc will roll out countermeasures in April, but the fear is that a full-scale transatlantic trade war will break out, causing severe damage to many sectors of the EU's economy.
That's all for this week! Feel free to reach out to me on any of these issues on Twitter @RikardJozwiak, or on e-mail at jozwiakr@rferl.org .
Until next time,
Rikard Jozwiak
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