The European Commission President announced:
- The first point of the plan is to expand the use of public defense funding at the national level. The EU will propose bypassing the EU’s Growth and Stability Pact. If member countries increase their defense spending by an average of 1.5% of GDP, this could create fiscal space of around €650B over four years.
- The second point is the creation of a new instrument that will provide €150B in loans to member states for defense investment. This will help countries pool demand and purchase equipment together and significantly strengthen their support for Ukraine.
- The third point is leveraging the power of the EU budget. “We will offer additional opportunities and incentives for countries to decide whether they want to use cohesion policy programs to increase defense spending,” von der Leyen explained.
- The plan’s fourth and fifth points are aimed at mobilizing private capital. ReArm Europe can potentially mobilize around €800B for a secure and resilient Europe.