“The European Commission has formalised the content of its ReArm Europe plan. Whether member states decide to contribute to boosting EU defence spending will depend on their fiscal positions and the appeal of EU loans. 1. The need to boost EU defence In response to growing pressure to increase spending on defence, last week, the European Commission presented the details of its ReArm Europe plan/Readiness 2030. 2. National budgets will be in the driving seat Germany, the Netherlands, Sweden and small EU NATO countries are likely to contribute most to the increase in EU defence spending, while the engagement of Belgium, France, Italy and Spain will probably be more constrained. 3. EU long-maturity loans to encourage more spending Although EU borrowing appears less appealing than it was in the past, the long duration of the EU loans might create the right incentive for countries to take on more debt and could therefore foster more coordinated defence investment at the EU level.”
Morten W. Langer
