The European Union plans to boost defense spending by €800 billion through the 'ReArm Europe' plan. This involves two key pillars: activating the Stability and Growth Pact's escape clause and establishing a new joint procurement instrument called SAFE (Security Action for Europe).
Thirteen EU member states have activated the escape clause to increase defense spending, aiming for a 1.5% GDP increase in spending between 2025 and 2028. Larger member states like France, Italy, Spain, and the Netherlands are yet to decide. The activation is contingent on exceptional circumstances (the war in Ukraine), its impact on public finances, and the lack of threat to long-term fiscal sustainability.
SAFE aims to raise €150 billion to fund joint military equipment procurement, primarily from European defense industries. Negotiations are ongoing regarding the definition of 'European' investments, with ongoing discussions about flexibility for governments versus prioritization of European firms. Third countries with EU security and defense partnerships may also participate.
Concerns remain regarding the EU's dependence on arms imports. Currently, the US is the primary arms supplier to European NATO members. SIPRI's Pieter Wezeman expresses skepticism about the plan's effectiveness in reducing this dependency, citing fragmented spending, close industry ties, and high demand for weapons from countries like Israel. The EU's White Paper for European Defence Readiness 2030 highlights the need for a larger EU-wide defense market to scale up the European defense industry.
While the ReArm Europe plan aims for significant increase in spending and bolstering the European defense industry, challenges regarding procurement, interoperability, and dependence on external suppliers remain.