European Centre for Counterterrorism and Intelligence Studies, Germany & Netherlands – ECCI
EU leaders to ask for flexible use of bloc’s money for defence
Euractiv – Ursula von der Leyen’s team is set to come up with a letter on funding options to support procurement and production across the bloc.
The Commission is expected to propose new defence funding options at next week’s Council summit, but EU leaders have some ideas they wish to present, according to a letter obtained by Euractiv. EU Security
The extraordinary meeting on 6 March will take place against the backdrop of the US urging Europeans to take charge of their own defence and the risk of US withdrawal from the continent’s security architecture.
The debate is expected to focus on finding hundreds of billions to support the industry’s reform for the much-needed defence projects, such as an air defence shield, munitions, cyber defence, and the border with Belarus-Russia.
Ursula von der Leyen’s team is set to come up with a letter on funding options to support procurement and production across the bloc, according to the draft text seen by Euractiv.
After outlining the options during the Summit, the Commission is expected to detail them in a White paper on the future of European defence on 19 March.
However, in anticipation of the proposals, leaders are already moving forward on several fronts, having requested options as far back as June. EU Security
One idea is to repurpose different EU budget funds to finance their defence needs. For example, cohesion funds, intended to support businesses in poorer regions, could be redirected to defence, even though it is not their primary purpose.
EU leaders are expected to ask the Commission to “propose additional funding sources for defence at EU level, including by means of additional flexibility in the use of structural funds, and to present swiftly relevant proposals,” according to a draft declaration, also seen by Euractiv.
While cohesion funds may already be used to help defence manufacturers establish themselves, this is hardly ever the case. Thus, EU countries are now awaiting a green light from the Commission to push them in this direction. EU Security
All options on the table
The European Investment Bank’s role in defence funding is also on the leaders’ radar. EU countries will consider “ re-evaluating the list of excluded activities,” the draft text says.
The Bank’s lending policy has so far excluded investing in ammunition and other purely military production.
Until now, the Commission has focused its efforts on promising flexibility in the bloc’s budget rules for countries that want to invest in defence.
For instance, it has proposed allowing individual countries more leeway via the national escape clause option, and to review the definition of defence expenditure to open up more investment opportunities, according to Euractiv’s information. EU Security
EU Security – More Ukraine support?
In parallel, the leaders will discuss the diplomatic service’s proposal to send billions of aid to Ukraine, although any remark related to this proposal remains to be determined in the current state of the text.
While urgent needs are estimated at €6 billion, the country could ultimately benefit from €20 billion in support, according to an EU diplomat. Budapest has, however, so far signalled opposition to the scheme.
When it comes to the much-discussed security guarantees the Europeans can offer to Ukraine, the leaders are expected to ask the EU diplomatic arm to “assess the conditions for a further EU contribution to security guarantees for Ukraine, including by examining options for political, financial, or operational support.” EU Security
European Centre for Counterterrorism and Intelligence Studies, Germany & Netherlands – ECCI
