Brussels (Brussels Morning Newspaper) – European Union member nation’s finance ministers will discuss on March 10, 2025, how to pay for defence via new joint borrowing, existing EU funds and a greater part for the European Investment Bank, to be decided in June, the Polish EU presidency said.
Andrzej Domanski, the finance minister of Poland, who chairs European Council meetings, in an invitation letter to the ministers, stated the talks would expand on decisions by EU leaders to European countries are hastening to increase defence spending and strengthen support for Ukraine after U.S. President Donald Trump suspend U.S. military aid to Kyiv and introduced doubts about Washington’s commitment to European partners.
“Given the rapidly evolving security landscape, Europe must reflect deeply on the future of defence spending,”
Domanski stated in the note.
“A stable and predictable funding framework is essential to systematically develop European defence capabilities,”
He added.
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How will EU finance ministers fund future defence projects?
As reported, the ministers will talk about a European Commission proposal for the European Union to raise 150 billion euros for the security of the EU budget, and for loans to governments for defence projects.
They will also examine the use of EU cohesion funds to disburse for dual-use projects that benefit both civilians and the army. Another matter will be the idea that the EIB, a bank owned by EU governments, should widen the scope of projects it can lend for and improve the amount of money available, to help increase the amount of money available for Europe’s defence.
How will EU nations adjust fiscal rules for military spending?
The letter further said that, on the second day of the session, the ministers will discuss how to change EU fiscal regulations to provide room for more national spending.
Domanski expressed the ministers should therefore examine what constitutes defence spending to enlarge the existing definition which now only takes into account military hardware, but not, for example, the recruitment of soldiers who could utilise it.
The ministers will also converse about how the growth in defence should be calculated. Poland is proposing to utilise it as a benchmark defence spending level from 2021 – the last year before Russia plagued Ukraine in February 2022.
Lastly, the ministers will debate how long the extra fiscal space should last. While the Commission presented four years, many governments, including Germany, discussed defence schemes last 10 years or more and that they want a more enduring change in the rules than just a growth measure of four years.
