The European Commission has outlined the main directions for its defensive reform that will cost billions.

In response to a potential reduction in military support from the US and the need to increase its assistance to Ukraine, the EU plans to invest hundreds of billions of euros to strengthen its defense capabilities.

The EC has detailed the defense reform priorities:

1. Flexibility in budgetary rules, allowing for up to €160B to be allocated to finance defense spending.
2. Creation of a common financial instrument for investment in defense technologies, which will include air defense systems, long-range weapons, drones, and AI for military applications.
3. The potential to attract private capital by easing the EIB’s restrictions on investment in the defense sector.

The EU is also discussing the potential use of unspent funds from the economic recovery fund that was established following the pandemic, with only 6.4% of the €392B having been utilized.

Germany plans to expedite the establishment of a national defense fund amounting to €200B. Additionally, Poland and several other countries are planning to create separate defense funds outside of the EU’s structure to accelerate investment.