Von der Leyen looks for flexibility in European defence spending
The European Commission wants to give member states more budgetary leeway on defence spending, president Ursula von der Leyen announced after an informal summit in Brussels.
“I am ready to explore and use the full flexibility in the Stability and Growth Pact [the European rules on the monitoring of national budgets] to allow a significant increase in defence spending,” she said. “In extraordinary times, it should be possible to take extraordinary measures.”
There is broad consensus among European heads of state and government that, after years of low investment, there needs to be a substantial increase in defence spending, but national budgets are limited and the pact commands member states to keep budget deficits below 3 per cent.
"In extraordinary times, it should be possible to take extraordinary measures"
Von der Leyen wants the European Investment Bank, which currently only invests in projects that can serve both civilian and military purposes, to expand its operations. According to her, the bank is ready to do so and has set aside funds. She hopes this could also move private banks to lend more to defence projects.
German chancellor Olaf Scholz agreed that member states should be given more flexibility to invest in defence. However, he, like other government leaders, remains opposed to the idea of borrowing money at European level to finance projects.
“The European Union has no prospect of taking on common debt,” said Scholz, who faces an election in Germany later this month.
Progress made
European Council president Antonio Costa nevertheless wants to continue working on “other joint options” to get projects off the ground.
He said member states had made a lot of progress since the Russian invasion of Ukraine. Defence spending increased by 30 per cent from 2021 to 2024, and the 23 member states that also belong to NATO already spend on average about 2 per cent of their GDP on defence.
Shortly after taking office this week, new Defence minister Theo Francken called for Belgium to make significant investments in its armed forces.
The government wants to raise defence spending to 2 per cent of gross domestic product by 2029, in line with the norm agreed within NATO. By 2034, that figure should rise to 2.5 per cent.
President of the European Commission Ursula von der Leyen at a press conference following an informal EU leaders’ summit in Brussels, 3 February 2025 © PHOTO JOHN THYS / AFP
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