New Approaches to Defense Spending in Europe
07 April 2025 12:40
This week, finance ministers from European Union countries will discuss a proposal to create a new joint defense fund, known as the European Defense Mechanism (EDM), aimed at financing the rearmament of the continent. According to this proposal, countries outside the EU, such as Ukraine, will also be able to join the fund.
This information was reported by Reuters, citing a document prepared by the Bruegel center for discussion.
New EU Defense Fund: Financing Rearmament Plans
The proposal, which will be considered at an informal meeting in Warsaw on April 12, is part of the EU's efforts to strengthen defense capabilities in light of Russia's war against Ukraine and the recognition of the need to reduce dependence on the United States. The fund will complement existing EU plans to increase military spending by €800 billion.
EDM is proposed to be established as an intergovernmental structure with significant capital, allowing for market funding. This will enable participating countries (including potential members outside the EU – Ukraine, the United Kingdom, Norway) to finance the procurement of costly “strategic” weapons (command systems, intelligence, air defense, modern fighters, transport, missiles) without immediate increases in national debt.
The fund could also contribute to the formation of a unified European defense market, primarily sourcing procurement from European contractors. As noted by Bruegel, such an approach is crucial for reducing Europe’s military dependence on the United States by 2030.
The EU Aims to Create a Defense Fund in Light of Trump's Return
In December, it was reported that the European Union was discussing the establishment of a joint defense fund amounting to €500 billion to boost defense spending ahead of the return of the newly elected U.S. President Donald Trump.
This funding model, which will also be available not only to EU member states, is gaining traction among key countries in the European Union.
Europe has long been contemplating how to increase defense spending to continue supporting Ukraine and prepare for the arrival of newly elected U.S. President Trump.