European Defence Fund, EIB, Stability Pact: the cards on the table in the arms race

As London proposes a pan-European Defense Fund, the European Commission is working on a package of measures that EU leaders will begin discussing at the extraordinary European Council on March 6. Options on the table range from excluding defense spending from the Stability Pact to issuing EIB debt tied to sector funding. 

European Defense Fund, over one billion euros for the 2025 calls

Also at stake are the European funds from the MFF, including Cohesion, and the unused borrowing capacity of the Next Generation EU.

On the eve of British Prime Minister Keir Starmer's departure for Washington, the prospect, anticipated by the Financial Times, of a common pan-European fund for increasing military spending, involving EU countries and Great Britain, is confirmed. The idea comes from London, which has already decided to increase its military spending from 2.3% to 2.5% of GDP by 2027 (and then to 3% after 2029), and was confirmed by Polish Prime Minister Donald Tusk, the current President of the EU Council, along with the European measures package.

EU Heads of State and Government will discuss it at the extraordinary European Council on Ukraine and Europe's security convened by President António Costa for March 6.