European Commission President Ursula von der Leyen presented a new financial instrument called Security Action for Europe, through which the Commission will offer member states loans of up to €150 billion for investments in air defence, drones, and cyber security, at the European Parliament plenary session on Tuesday.
“These loans should finance purchases from European manufacturers, boosting our own defence industry,” von der Leyen stated.
The Presidents of the European Commission and the European Council underscored the pressing need for increased military expenditure within the EU during their speeches at the session. The session focused on the conclusions from the Special European Council meeting on EU defence held on March 6.
Ursula von der Leyen “We need to exceed 3% of GDP for military spending”
“We need to exceed 3% of GDP for military spending,” von der Leyen stated, highlighting that the current EU budget only amounts to approximately 1% of GDP. She insisted that “mobilising national budgets” is crucial, asserting that current defence spending is just below 2% of GDP. “Every analysis agrees that we need to move north of 3%,” she added.
Following von der Leyen’s remarks, Council President Costa noted that EU member states had increased their defence spending by 30% over the past three years. He pointed out that 23 EU countries, which are also NATO members, have reached the alliance’s target of 2% of GDP allocated to defence.
Both leaders called for rapid, flexible decisions to implement strategies aimed at bolstering Europe’s defence. They noted that common defence initiatives must not only deter threats but also assist in addressing the military supply gaps faced by Ukraine, ensuring its security and enhancing its self-defence capabilities
Von der Leyen remarked on the unprecedented consensus among member states regarding the defence plan, explaining that activating the national escape clause could mobilise up to €650 billion over the next four years, adding 1.5% of GDP to their defence budgets during that period.
In addition to the national escape clause, she presented a new financial instrument called Security Action for Europe, through which the Commission will offer member states loans of up to €150 billion for investments in air defence, drones, and cyber security.
“These loans should finance purchases from European manufacturers, boosting our own defence industry,” von der Leyen stated, urging for multiannual contracts to provide the industry with the predictability it requires. She further highlighted the importance of joint procurement, pointing out that such orders promote scalability and reduce costs. “Speed and scale are precisely what we need right now,” she added, noting that the emergency procedure under Article 122 was selected as the only viable method for rapid financial assistance.
Concluding her address, von der Leyen offered member states the option to voluntarily redirect uncommitted cohesion funds to support defence-related projects, including infrastructure and research and development. She also referenced the REARM Europe initiative, which will mobilise private investment through collaboration with the European Investment Bank, promising positive impacts on the EU’s economy and competitiveness.
Costa “Competitiveness and defence must go hand in hand to enhance Europe’s industrial and technological prowess”
Costa expressed approval for the Commission’s new financial tool aimed at defence, highlighting how the European Investment Bank’s initiative to expand its mandate for loans to the defence sector will facilitate access to private financing. He reiterated the importance of joint procurement efforts to ensure standardisation and simplify permitting and reporting requirements.
“Competitiveness and defence must go hand in hand to enhance Europe’s industrial and technological prowess,” Costa asserted. He called for greater unity among member states in light of current geopolitical circumstances, mentioning positive responses from NATO partners including the United Kingdom, Canada, Turkey, Norway, and Iceland regarding the outcomes of the Special Council meeting.
Costa reaffirmed the EU member states’ commitment to continue supporting Ukraine during the war, as well as in future peace negotiations once the country decides to pursue them. He noted that since 2022, member states have provided over €135 billion in aid to Ukraine, with some pledging an additional €15 billion.
In concluding the plenary debate, Costa stressed that the conflict in Ukraine is not merely a regional issue but fundamentally linked to the principles of international law and the respect for internationally recognised borders.
A majority of political group leaders within the Parliament reaffirmed their longstanding support for a stronger EU security framework, welcoming recent discussions within the European Council. Numerous MEPs endorsed the European Commission’s proposals to enhance Europe’s defence industry, fortifying EU borders, and sustaining support for Ukraine against Russia’s aggression.
EPP’s Manfred Weber insisted that the proposed defence budget be presented for Parliamentary approval. Meanwhile, S&D’s Garcia Perez suggested utilising frozen Russian assets to support Ukraine’s efforts. GUE’s Martin Schirdewan raised concerns regarding the fiscal implications of allocating up to €800 billion for defence, while Greens’ Bas Eickhout stressed the importance of also focusing on infrastructure and energy independence alongside military considerations.
Voice Cyprus News-2025
