Brussels: Europe and the Arabs
"We live in the most dangerous and important times. I do not need to describe the serious nature of the threats we face. Or the devastating consequences we will have to endure if these threats materialize. Because the question is no longer whether Europe's security is very real. Or whether Europe should take more responsibility for its own security. In fact, we have known the answers to these questions for a long time," the President of the Commission added in her speech published in Brussels on Tuesday morning. "The real question before us is whether Europe is ready to act decisively as circumstances dictate. And whether Europe is ready and able to act with the necessary speed and ambition. In the various meetings of the past few weeks - most recently two days ago in London - the answer from European capitals has been resounding and clear. We are in an era of rearmament. Europe is ready to significantly increase its defense spending. We aim to respond to the urgent short-term need to act and support Ukraine, but also to address the longer-term need to take greater responsibility for our European security.

That is why I wrote a letter to leaders today ahead of Thursday’s European Council. That is why we are here together today. In this letter to leaders, I set out a plan for rearming Europe. This set of proposals focuses on how we can use all the financial levers at our disposal – to help member states increase defence spending quickly and significantly. Urgently now, but also over a longer period of time, over this decade. There are five parts to this plan.

The first part of this plan for rearming Europe is to unleash the use of public finance for defence at national level. Member states are prepared to invest more in their security if they have the fiscal space. We must enable them to do so. That is why we will soon propose to activate the national escape clause of the Stability and Growth Pact. It will allow member states to significantly increase their defence spending without triggering excessive deficit measures. For example: if Member States increased their defence spending by 1.5% of GDP on average, this could create a fiscal space of close to €650 billion over four years.

The second proposal would be a new instrument. It would provide €150 billion in loans to Member States for defence investment. It is essentially about spending better – and spending together. We are talking about areas of pan-European capability. For example: air and missile defence, artillery systems, missiles and ammunition, drones and anti-drone systems; but also to address other needs from cyber to military mobility for example. It would help Member States to pool demand and buy together. Of course, with this equipment, Member States could significantly step up their support for Ukraine. So, immediate military equipment for Ukraine. This approach to joint procurement would also reduce costs, reduce fragmentation, increase interoperability and strengthen our defence industrial base. And that could be to the benefit of Ukraine, as I just described. This is the moment that Europe is waiting for, and we must rise to this moment. The third point is to use the power of the EU budget. There is much we can do in this area in the short term to channel more money into defence-related investments. That is why I can announce that we will propose additional possibilities and incentives for Member States to decide, if they want to use the cohesion policy programmes, to increase defence spending.
The last two areas of work are to mobilise private capital through the acceleration of the Savings and Investment Union and through the European Investment Bank.
In conclusion: Europe is ready to take on its responsibilities. The Re-Arming Europe initiative could mobilise almost €800 billion for a secure and resilient Europe. We will continue to work closely with our NATO partners. This is an important moment for Europe. We are ready to step up our efforts.