After Ursula von der Leyen announced a new approach to strengthening the EU's defence capabilities in her Political Guidelines, this is now taking shape. The ‘White Paper for European Defence Readiness 2030’ published by the EU Commission on 19 March is intended as a first outline of a joint approach to building robust EU defence capabilities. It is related to the Draghi Report on strengthening the EU's competitiveness and the Niinistö Report, which serves as the basis for the Preparedness Union. The ReArm Europe plan, which the EU Commission presented at the beginning of March 2025, proposes various financial levers to promote investment in the defence sector.

A new EU defence concept
The White Paper suggests seven guidelines to address weaknesses and reduce dependence on supplies from third countries. It calls for the joint procurement of defence equipment and, where possible, the relocation of production to the EU. To make this possible, the aim is to further expand the European defence industry and the EU single market for defence. This is to be achieved among other through simplified regulations. An Omnibus is also planned for the defence sector. The ‘Defence Omnibus’ is due to be published in June 2025. At the same time, technological change is also being sought in the defence sector, to be accelerated by investment and the promotion of innovation in AI and quantum technology. The short-term focus is primarily on providing Ukraine with military aid. The long-term goal is to better prepare Europe for worst-case scenarios through greater military mobility and stockpiling, while also expanding strategic partnerships with like-minded countries at global level.

There is also the European Defence Industrial Strategy (EDIS). The Dedicated Programme for Defence (EDIP) Regulation is intended to initiate the implementation of the measures set out in EDIS. The EU Commission presented the 1.5 billion Euro programme on 5 March, and by applying an urgent procedure, the EU Parliament paved the way for a final vote in May. In addition, there are numerous other EU defence programmes and funds.  

Funding by ReArm and EDF
The European Commission’s ReArm Europe plan aims to generate over 800 billion Euro and thus increase Member States' defence spending. In order to free up public funds at national level, it is proposed that the Fiscal Escape Clause within the Stability and Growth Pact is activated. This would allow Member States to spend on defence without it being counted towards the EU's relevant deficit and debt criteria.

Another new instrument created as part of ReArm Europe is SAFE (Security Action for Europe). Here, the EU Commission wants to raise up to 150 billion Euro on the capital market. These funds are to be disbursed to member states in the form of long-term loans secured by the EU budget and based on national plans. However, the idea of joint borrowing for defence procurement is controversial among Member States and also in the European Parliament.

In addition to direct public investment, the European Investment Bank (EIB) is expected to increase its lending for defence and security projects. This should send positive signals to the markets and stimulate private investment. The Savings and Investment Union also has an important role to play here. Furthermore, it should now be possible to reallocate funds from the Cohesion Fund towards defence capabilities.

However, hardly any ‘fresh money’ is being is being injected as a result of these measures; rather, there are shifts in existing EU funding or incentives for public and private investment at national or private level. Money that comes directly from EU funds or is financed through the EU's Multiannual Financial Framework (MFF) is available under the European Defence Fund (EDF), which has been supporting Member States in the development of defence projects since 2021. A total budget of 7,3 billion Euro is available until 2027. On 30 April 2025, the EU Commission announced that it would invest further 910 million Euro in the creation of a strong and innovative defence industry under the 2024 edition of the European Defence Fund (EDF). These investments are to be in line with the White Paper and the planned ReArm Europe plan.

Critical voices
In a resolution on peace and security, the European Trade Union Confederation (ETUC) criticises the new defence plan. It is clarified: ‘Security is not created by more and more money for more and more weapons, but by prioritizing diplomacy, conflict and crisis prevention and active engagement for new disarmament and arms control initiatives. Security means first and foremost strong democracy and social progress, better living and working conditions, not the status quo.’ ETUC warns that the proposed financing mechanisms could lead to greater inequality within the EU. Another point of criticism is the diversion of Cohesion Fund money for defence purposes, which jeopardises essential spending on education, health and infrastructure. In general, ETUC calls for the establishment of a permanent European Investment Facility to address the long-term challenges as a whole – from the green and digital transformations to securing high-quality jobs – in a sustainable manner. There are also calls to safeguard social spending and involve social partners in ongoing discussions.

Further information
AK EUROPA: At the centre of EU policy. Defence and rearmament
EURACTIV: Von der Leyen’s ‘Rearm Europe’ plan and the holes in it
EURACTIV: Explainer: How to make sense of the EU’s defence funds and programmes
EURACTIV: EU Commission White Paper sets out steps for 'single market for defence'
ETUC: Resolution on peace and security  
ETUC: Towards a Coordinated and Fair European Investment Framework for Security and Prosperity
FEPS: European defence for security and peace