With grand plans under names such as Upprusta EU and Beredskap 2030, the EU Commission hopes for multi-billion investments in defense, both in member states and to help Ukraine.
Everyone emphasizes the need to hurry. Yet, it will likely take time before the money can really start flowing – and most of it depends on what happens or does not happen in the governments of member states.
Here are some of the plans and the obstacles that need to be overcome.
* A new multi-billion loan for defense procurement
The EU Commission wants to borrow 150 billion euros, which can then be lent to member states to make joint procurements of critical defense materials. On paper, it only requires a yes from two-thirds of member states to approve the loan. However, details are being debated about whether to allow purchases from companies outside the EU. Additionally, the EU Parliament wants to have a say – not because they are against the proposal, but mainly to show that they cannot be ignored.
* Exemptions from EU's tough budget rules
The Commission is talking about releasing a staggering 650 billion euros (approximately 7.2 trillion kronor at the current exchange rate) – without member states having to risk penalties for exceeding budget rules. However, this figure is entirely dependent on each EU country deciding to add an additional 1.5 percent of its GDP to defense investments. Moreover, there is disagreement about what should be counted as defense expenditures. For example, Spain wants to include climate measures and border control.
* Increased private capital through a savings and investment union
The figure is even more staggering, as the Commission talks about 11,000 billion euros (i.e., 11 trillion) sitting on private accounts across the EU, which could be invested to benefit the defense industry, among others. However, getting more EU citizens to invest in stock funds, as has long been done in Sweden, is not just about regulations but also about attitudes. And everything risks being locked up by a rather mundane question about who should oversee the whole process.
* Quick money for Ukraine
The EU's Foreign Minister Kaja Kallas wants to gather 40 billion euros for Ukraine aid this year and has chosen to make the proposal voluntary to avoid Ukraine-skeptical Hungary vetoing it. However, even among the others, there is disagreement, mainly about how to calculate how much each country should contribute.
The EU Commission presented its white paper on defense in the EU, under the name Beredskap 2030, on Wednesday. A first, simpler discussion about the plans will be held during the EU countries' summit in Brussels on Thursday, although a formal stance is not planned until June.
Meanwhile, the details of the proposals included in the plan Upprusta EU have been presented since the beginning of March. Now, everything will be negotiated among member states' officials before decisions can be made by primarily finance and defense ministers.
Defense funds will also be a major part of the discussions about the EU's next long-term budget for the years 2028 to 2035. The EU Commission's first proposal is expected in July, with demands from several member states for a significant budget increase.
