EU Commission Unveils $840 Billion Plan to Boost Defense

The president of the European Commission has outlined a five-point plan called ReArm Europe and said it was an ‘era of rearmament.’

European Commission President Ursula von der Leyen unveils her Rearm Europe plan at EU headquarters in Brussels, on March 4, 2025. Virginia Mayo/AP

The president of the European Commission, Ursula von der Leyen, has outlined a five-point plan called ReArm Europe which she said could boost the European Union’s defense spending by 800 billion euros ($840 billion).

Speaking on Tuesday, von der Leyen said Europe must “step up” and meet the challenge it faces.

Her announcement—which will be discussed by EU leaders at a special summit on Thursday—came only hours after the United States government paused all military aid to Ukraine.

Since fighting erupted between Russia and Ukraine in 2022, the United States has sent at least $175 billion in aid, including cash and military equipment, to support Ukrainian defense efforts.

Since President Donald Trump returned to the White House in January, he has emphasized Europe needs to step up and increase its defense spending, and shoulder more of the burden of defending the continent after decades of relying on the protection of Washington.

Von der Leyen said, “The real question in front of us is whether Europe is prepared to act as decisively as the situation dictates, and whether Europe is ready and able to act with speed and with the ambition that is needed.”

“In the various meetings in the last few weeks, most recently two days ago in London, the answer from European capitals has been as resounding as it is clear,” she added.

‘Era Of Rearmament’

Von der Leyen said, “We are in an era of rearmament, and Europe is ready to massively increase its spending, both to respond to the short-term urgency to act and to support Ukraine, but also to invest in the long term, to take on more responsibility for our own European security.”

The European Union has 27 member countries and does not include Britain, Norway, Turkey or Iceland, which are in NATO.

On Feb. 25, Britain’s Prime Minister Sir Keir Starmer announced the UK would commit 2.5 percent of its gross domestic product (GDP) to defense spending by 2027, and would target 3 percent of GDP for defense within the decade.

On Tuesday, Von der Leyen set out her five-point action plan, ReArm Europe.

She said this would include activating the national escape clause of the EU’s stability and growth pact, an obscure financial mechanism which prevents member states borrowing too much.

Von der Leyen said this would allow each EU member state to increase their defense spending by 1.5 percent of GDP, which could raise 650 billion euros ($684 billion) over the next four years.

She said the plan would also include creating a new financial instrument which would allow EU members to borrow 150 billion euros ($157 billion) for defense investment.

“The third point is using the power of the EU budget ... to direct more funds towards defense-related investments,” von der Leyen added.

She said the last two areas of the five-point plan aimed to mobilize private capital by accelerating savings and investment.

Von der Leyen said: “Europe is ready to accept its responsibilities. We will mobilize 800 billion euros of defense expenditure for a safe and resilient Europe. We'll of course continue working closely with  our partners in NATO.”

Earlier this month von der Leyen announced she would accept a recommendation from Poland and relax the fiscal rules to allow more defense spending.

On Feb. 15, Von der Leyen said European Union nations were spending on average about 2 percent of their GDP, but she said they needed to increase it to above 3 percent.

NATO Targets

That would still be well below the 5 percent Trump has urged NATO countries to spend.

National Security Adviser Mike Waltz said outside the White House on Monday, “We welcome the Europeans.”

He also said this shift required European nations to invest more in their defense capabilities.

French President Emmanuel Macron (R) and his wife Brigitte Macron (2ndR) welcome President Donald Trump (2ndL) and US First Lady Melania Trump at the Biarritz lighthouse, southwestern France, ahead of a working dinner on Aug. 24, 2019, Nicholas Kamm/AFP/Getty Images

On Sunday, France’s President Emmanuel Macron told Le Figaro his country and other European nations must spend more on defense.

He said this might mean in the region of 3 percent to 3.5 percent of GDP.

Macron also said the European Commission needed to be more innovative when it comes to defense spending, and he said, “We probably need, initially, 200 billion euros to be able to invest.”

That amount is equivalent to about $209 billion.

A handful of European countries—Serbia, Belarus, Bosnia-Herzegovina, and Ukraine—are neither in NATO nor the EU.

Belarus is a firm ally of Moscow, while Serbia is traditionally close to Moscow, although it is keen to join the EU.