BRUSSELS — European Union leaders have ratified a significant plan to mobilize extensive funding for reinforcing their defense capabilities. This move comes in response to the Trump administration’s recommendations that Europe should independently bolster its security, particularly concerning the volatile situation in Ukraine.
After intensive discussions lasting over 12 hours on Thursday, the leaders of the 27-member bloc approved an initiative to relax financial restrictions on defense expenditures. This plan will channel unused EU funds into security enhancements and offer 150 billion euros ($162 billion) in loans specifically for military acquisitions.
Priority allocation of these resources will focus on air and missile defense systems, artillery, ammunition, drones, air transport, alongside advancements in cyber systems, artificial intelligence, and electronic warfare.
The ongoing three-year conflict in Ukraine was a central topic; however, immediate solutions to sustain Ukraine’s defensive efforts were not forthcoming following the cessation of U.S. military aid and intelligence sharing. No new weaponry commitments or financial support was pledged during the talks.
Hungary blocked a joint declaration on backing Ukraine, diverging from the collective stance of the remaining 26 EU nations, which emphasize that a “peace through strength” strategy is vital for their conflict-stricken partner.
Relaxation of Financial Constraints
All 27 leaders have agreed on the necessity of the European Commission— the EU’s executive authority— to relax budgetary limitations, allowing countries eager to increase their defense budget to do so. The Commission typically oversees members’ fiscal health, ensuring debt control.
Projections suggest that approximately 650 billion euros ($702 billion) might be unlocked through this initiative, offering countries the potential to allocate at least 3% of their GDP to defense efforts. Currently, NATO encourages members to aim for a minimum of 2% spending. However, countries like Italy and Spain are among the seven EU nations not meeting this threshold.
It remains uncertain whether countries that have been lagging in meeting the 2% mark, despite pledges made over a decade ago, will now find the capacity to fulfill such commitments.
A Defense Loan Initiative
Another proposal under consideration involves issuing 150 billion euros ($162 billion) in loans intended for military procurement. This aligns with lessons from Ukraine’s battlefield experiences, prioritizing air and missile defense enhancement.
The European Commission plans to raise these funds from financial markets, aiming to provide approximately 20 member states with access to more affordable rates.
However, the proposal didn’t receive unanimous support. Instead, EU leaders instructed headquarters staff to promptly examine the plan. France expressed concerns about the insufficiency of the fund, while Spain, burdened with substantial debt, advocates for outright grants instead of loans.
Hungary’s Stand-Alone Approach
Hungary’s Prime Minister, Viktor Orbán, a prominent supporter of former U.S. President Donald Trump, is notably aligned with Russian President Vladimir Putin. Orbán opposed the summit’s statement endorsing Ukraine.
This blockage is not unprecedented; Hungary has a history of creating deadlocks, prompting its EU counterparts to proceed despite its dissent.
European Council President Antonio Costa emphasized that while Hungary’s position is acknowledged, the collective will of the other 26 members takes precedence. “Hungary is isolated among the 27, and we respect Hungary’s position,” he remarked post-meeting.
Orbán, however, appears content with this role, suggesting that it is the EU that finds itself isolated globally due to its policies.
Ukraine’s Concerns and EU Considerations
Ukrainian President Volodymyr Zelenskyy joined the EU leaders, expressing gratitude for their security strategy and hoping this increased spending will bolster Ukraine’s defense capabilities.
Zelenskyy highlighted Ukraine’s cost-effective weapons production near the frontlines, emphasizing its strategic value. “We are very thankful that we are not alone, and these are not just words. We feel it. It’s very important,” Zelenskyy commented, displaying more ease in Brussels compared to his recent confrontational exchange with Trump in Washington.
Despite the optimistic discussions, the EU summit did not result in new military aid for Ukraine, despite urgent pleas following a recent bombing in Zelenskyy’s hometown.
Notably absent from discussions was any consideration of unfreezing approximately 183 billion euros ($196 billion) in Russian assets held in Belgium. There are debates on whether using the interest from these assets, rather than the principal funds, could better support Ukraine, while others worry that asset seizure could negatively affect the euro’s stability.
