ReArm: EU Unveils €800 Billion Defense Plan to Strengthen Europe and Bolster Ukraine

European Commission President Ursula von der Leyen unveiled ReArm, a sweeping EU defense initiative aimed at drastically increasing military spending and strengthening European security, including enhanced support for Ukraine on March 4.

Von der Leyen emphasized that Europe must take greater responsibility for its security, calling for a significant boost in defense investment both immediately and over the next decade.

Five key elements of ReArm

The ReArm plan consists of five major components designed to mobilize financial resources and modernize European defense capabilities:

1. Unlocking national defense spending

   • EU member states will be allowed greater fiscal flexibility to increase their defense budgets without triggering excessive deficit procedures.

   • If implemented, the measure could free up $684 billion (€650 billion) over four years if member states raise their defense spending by an average of 1.5% of GDP.

2. $158 billion in defense investment loans

   • A new funding mechanism will provide $158 billion (€150 billion) in loans for EU countries to jointly invest in critical military capabilities such as:

     • Air and missile defense systems

     • Artillery, munitions, and drones

     • Cyber defense and military mobility

   • This joint procurement strategy will allow nations to streamline costs and accelerate weapons production, particularly to support Ukraine’s military needs.

3. Expanding the EU budget for defense

   • New incentives will be proposed to redirect cohesion policy funds toward military projects, allowing nations to invest more without compromising economic stability.

4. Mobilizing private capital for defense

   • The EU will accelerate the creation of a savings and investment union to attract private sector financing for military development.

5. Leveraging the European Investment Bank (EIB)

   • The EIB will play a larger role in supporting European defense companies and boosting industrial production of military equipment.

Von der Leyen underscored that Europe is prepared to take responsibility for its security, with the ReArm plan potentially mobilizing $842 billion (€800 billion) in defense spending for a safer and more resilient Europe.

“We will, of course, continue working closely with our NATO allies. But this is Europe’s moment, and we are ready to step up,” she declared.

Earlier, Hungary blocked a proposed $21 billion (€20 billion) EU military aid package for Ukraine, further complicating European efforts to support Kyiv.

According to the publication, the EU had already committed $63.1 billion (€60 billion) in military assistance for Ukraine in 2025, and those funds remain secure. However, Budapest staunchly opposes the new €20 billion package.

Hungarian Prime Minister Viktor Orbán has been leading the resistance against additional aid, while Slovak Prime Minister Robert Fico has also declared that Slovakia will not provide any further financial or military support to Ukraine.