Southern European countries do not support the EC’s rearmament plan for Europe.

Several European countries have resisted the European Commission’s initiative to boost defense spending through low-interest loans, fearing it would exacerbate their already significant debt burden. In particular, France, Italy, and Spain oppose EC President Ursula von der Leyen’s proposal to finance defense spending with low-cost loans.

The plan includes a package of loans backed by EU budget guarantees totaling €150B, along with a relaxation of EU fiscal rules aimed at unlocking new defense investment and reducing security dependence on the United States.

Heavily indebted countries in southern Europe are proposing an alternative in the form of defense bonds – grants financed by joint EU borrowing on capital markets, which must be unanimously approved by the 27 member countries of the bloc. Von der Leyen has yet to endorse the idea, given the likely opposition from northern countries such as Germany and the Netherlands, who worry it could set a precedent for mutual debt repayment.