European Commission President Ursula von der Leyen’s Rearm Europe initiative arrives at a critical moment, as Washington indicates a shift in its security commitments and Ukraine’s future remains uncertain. But can Europe truly assume responsibility for its own security, or is this plan the minimum that Europe may be too late to implement?

Record Sum for Defence

European Commission President Ursula von der Leyen has proposed arming Europe with €800 billion under the Rearm Europe initiative. This plan aims to meet Europe’s immediate security needs while maintaining support for Ukraine. By strengthening Europe’s defence potential and industrial capacities, the continent would take greater long-term responsibility for its own security.

Von der Leyen’s announcement followed an emergency summit in London attended by top EU leaders, Canada, and the Ukrainian president. A key backdrop to this proposal was Volodymyr Zelenskyy’s heated exchange in Washington with POTUS Donald Trump and Vice President JD Vance regarding how to end the war. The Rearm Europe plan also responds to the expected reduction of US involvement in guaranteeing Europe’s security, as Washington appears to have different views on supporting Ukraine and ending the war.

According to von der Leyen: ‘The question is no longer whether Europe’s security is threatened in a very real way. Or whether Europe should shoulder more of the responsibility for its own security,’ but rather: ‘Is Europe prepared to act as decisively as the situation dictates? And is Europe ready and able to act with the speed and ambition that is needed?’

How Will the €800 Billion Be Funded?

At the unveiling of the plan, the President of the European Commission outlined several funding proposals, such as the activation of the Stability and Growth Pact’s escape clause. This would allow member states to significantly increase defence spending without facing EU sanctions.

A €150 billion loan from the European Commission for security investments will also be available to member states, to be spent in a coordinated manner to avoid redundancy.

The possibility of reallocating EU budget funds toward defence, including using cohesion funds for military purposes, is also on the table. Meanwhile, the mobilization of private capital and financing from the European Investment Bank could further boost resources in the sector.

‘The €150 billion loan seems substantial, but divided among 27 member states over five years, it becomes a relatively modest amount per country’

How Much Will This Actually Cover?

While €800 billion may seem ambitious, a significant portion of this amount comes from existing national defence budgets, which were already at €326 billion in 2024. This figure is expected to increase further, especially if NATO members agree to raise the minimum defence spending to 3 per cent of GDP at the upcoming Hague summit in June.

The €150 billion loan seems substantial, but divided among 27 member states over five years, it becomes a relatively modest amount per country.

Can This Replace Us Security Guarantees?

If the goal is to replace American military support, this funding is far from sufficient. The US defence budget alone for 2025 is projected to reach $850 billion, an amount Europe is planning to spend over five years. This clarifies that Rearm Europe is not a game changer in terms of global defence.

Additionally, Europe remains heavily dependent on US defence technology, with about 80 per cent of its military procurement coming from imports, primarily from the US, where ready-to-use military equipment is available. Europe still relies on the US for key capabilities, including fighter jets such as Lockheed Martin’s F-16 and F-35, as well as reconnaissance radars, logistics and ballistic missile defence. Not to mention the nuclear protection provided under the US nuclear umbrella to the 100,000 US troops stationed in European allied countries.

Given these factors, the €800 billion rearmament package is more in the category of ‘too little, too late’ rather than a true game changer for European security. In this context, Europe’s best strategy may be maintaining strong US ties while simultaneously working towards greater defence autonomy.

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