How can the EU unlock up to €800bn for its ‘rearmament plan’?
The EU Commission has unveiled plans to borrow €150 billion to fund a major rearmament push. This joint borrowing proposal comes in the form of loans rather than grants—an idea largely rejected by so-called 'frugal' countries such as Germany and the Netherlands.
READ MORE : http://www.euronews.com/2025/03/05/how-can-the-eu-unlock-up-to-800bn-for-its-rearmament-plan
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The EU Commission has unveiled plans to borrow €150 billion to fund a major rearmament push. This joint borrowing proposal comes in the form of loans rather than grants—an idea largely rejected by so-called 'frugal' countries such as Germany and the Netherlands.
READ MORE : http://www.euronews.com/2025/03/05/how-can-the-eu-unlock-up-to-800bn-for-its-rearmament-plan
Subscribe to our channel. Euronews is available on Dailymotion in 12 languages
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NewsTranscript
00:00The European Union is preparing to enter a rearmament phase.
00:09On Thursday, the European Commission will formally present a proposal for greater investment
00:15in defence at a special summit attended by the 27 heads of state and government.
00:21The Commission plans to grant €150 billion in loans to its EU members.
00:27The Commission suggests it will borrow the necessary amount from the markets and then
00:32lend these funds to the various countries over the long term.
00:37This arrangement will enable several member states to obtain more advantageous rates than
00:42if they borrowed on their own.
00:44We need that because we want to increase coordination and cooperation, both in terms of procurement
00:54as well as in terms of military integration.
00:59And for that, at the end of the day, you need something at the European level to really
01:05push things ahead.
01:07The Commission is also considering using an opt-out clause from the European budgetary
01:12rules.
01:13The Stability and Growth Pact sets a public deficit limit of 3% of gross domestic product.
01:21This exception would allow capitals to increase their spending within certain limits without
01:26triggering an excessive deficit procedure.
01:30I think that the adjustments, the flexibility introduced for the 3% budget deficits will
01:40considerably enable member states to raise their defence spending.
01:47I think overall it will be still a mixed picture, with some doing it more quickly and
01:55more comprehensively, while others perhaps joining in at a bit of a later stage.
01:59The Commission would like to see all European Union countries investing in the same direction,
02:05namely air and missile defence, artillery systems, ammunition, drones and missiles.
02:11It is also inviting its members to buy together.
02:15Let's also be clear, only if you order in larger amounts, in larger quantities, only
02:22then you will be able to bring down costs per unit and bring down and improve the scale
02:28economies essentially.
02:30So this is what you need to focus on.
02:34The Commission proposes to redirect European funds to undertake the investment.
02:39Finally, it wants to attract private capital through the European Investment Bank.