European Commission President Ursula von der Leyen said on Wednesday that Europe must act decisively to strengthen its defence, outlining a new initiative to mobilise nearly €800 billion in military spending over the coming years.
Speaking ahead of Thursday’s European Council meeting, von der Leyen said the security threats facing the continent are no longer in question, stressing that European leaders have responded with a clear message: “We are in an era of rearmament.”
“The question is no longer whether Europe’s security is at risk, but whether we are ready to act with the speed and ambition needed,” she said.
Von der Leyen detailed the ReArm Europe Plan, a multi-pronged proposal aimed at ramping up defence investments. The plan includes financial measures to allow member states to expand their military budgets without breaching EU fiscal rules, as well as mechanisms to encourage joint procurement of key defence systems.
Under the proposal, the EU will temporarily activate the national escape clause in its Stability and Growth Pact, enabling countries to increase defence spending without triggering the bloc’s Excessive Deficit Procedure. Von der Leyen said this could create €650 billion in fiscal space over four years if states raise defence budgets by an average of 1.5% of GDP.
Additionally, the Commission plans to introduce a €150 billion loan facility to support defence investments across Europe, targeting critical areas such as air and missile defence, artillery, drones, cyber capabilities, and military mobility. The initiative aims to lower costs through joint procurement, boost interoperability, and strengthen Europe’s defence industrial base.
“There is an urgent need to support Ukraine while also reinforcing Europe’s own long-term security,” von der Leyen said.
The plan also seeks to redirect EU budget funds toward military spending, allowing member states to allocate resources from cohesion policy programmes to defence investments. The final two components involve mobilising private capital through the European Investment Bank and accelerating the Savings and Investment Union.
Von der Leyen reaffirmed the EU’s commitment to NATO cooperation, stating that the bloc was prepared to take greater responsibility for its own defence.
“This is Europe’s moment. We are ready to step up,” she said.
