EU proposes major defence boost as it eyes Russia and Trump

European Union officials have unveiled plans to boost the bloc’s defence sector as it eyes rising threats and the need to increase self-reliance.

Under the proposed European Defence Industrial Strategy, announced by the European Commission on Tuesday, the bloc would boost spending and increase cooperation in procurement. The blueprint is driven both by the need to respond more effectively to Russia’s war in Ukraine and to reduce Europe’s heavy reliance on the United States.

The plan calls for the EU to inject 1.5 billion euros ($1.63bn) into a joint defence industry programme between 2025 and 2027. Member states would also be required to make at least 40 percent of their defence equipment purchases collectively by 2030, and to have the value of intra-EU defence trade represent at least 35 percent of the EU defence market.

Today we set our vision for defence readiness with Europe’s defence industrial strategy.

It will support Member States to not only spend more, but better, together and European.

And link Ukraine’s know-how with our defence industry to facilitate innovation.

— Ursula von der Leyen (@vonderleyen) March 5, 2024

“After decades of underspending, we must invest more on defence, but we need to do it better and together,” said EU foreign policy chief Josep Borrell. “A strong, resilient, and competitive European defence industry is a strategic imperative.”

The move marks a departure from the strategy of recent decades, which has seen Europe relying on the protective cover of the US through the NATO alliance, while their own defence spending has dwindled.

Russia’s invasion of Ukraine has exposed glaring weaknesses in Europe’s arms manufacturing capacities that were neglected in the wake of the 1989 fall of the Berlin Wall.

The EU’s pledge to provide Ukraine with huge quantities of weapons and ammunition have flopped, with production failing to keep pace and procurement beset by a lack of cooperation and coordination.

A greater role

In response, officials in Brussels have argued that national efforts are less efficient, and that the bloc must play a greater role in defence industry policy.

However, it is the prospect of a return by Donald Trump to the US presidency that has helped focus minds in Europe. Trump has regularly made comments undermining confidence regarding NATO’s collective security, as well as support for Ukraine.

“We need to get that transatlantic balance right, irrespective of election electoral dynamics in the US,” said European Commission Vice President Margrethe Vestager.

“We must take more responsibility for our own security, while, of course, remaining fully committed to our NATO alliance.”

EU heavyweights France and Germany have repeatedly warned that the bloc must do more to protect itself.

Last month, French President Emmanuel Macron sparked controversy when he said that sending Western ground troops to Ukraine could not be “ruled out”.

The Commission also called on the European Investment Bank (EIB) to change its policy this year to enable it to fund defence projects.

With a balance sheet total of 544 billion euros ($590bn), the EIB is the world’s biggest multilateral financial institution by assets and the biggest multilateral lender. However, its rules explicitly say that it cannot fund the production of ammunition and weapons or infrastructure for military use.

A proposal was also made to use a share of the profits produced by frozen Russian assets to fund arms purchases for Ukraine. Russia has threatened it will retaliate to any such move.