The European Commission presents the White Paper on European Defence

The European Commission presented the White Paper on European Defence this Wednesday, a plan designed to enhance the EU’s military capabilities by 2030. The document outlines a series of measures aimed at increasing investment, strengthening the European defence industry, and reducing reliance on external allies, with the objective of achieving greater strategic autonomy in security and defence.

The White Paper identifies current gaps in the EU’s defence capabilities and proposes solutions to address them. Among the main proposals is the closing of critical capability gaps, with a particular focus on those identified by Member States. The European Commission also aims to support the defence industry through increased aggregated demand and joint procurement, which would optimise resources and foster cooperation among countries.

Another key area of action is support for Ukraine through additional military assistance and greater integration between European and Ukrainian defence industries. This measure responds to the need to assist Ukraine in the context of the Russian invasion while also strengthening defence cooperation in the region.

The document also calls for deepening the EU defence market by simplifying existing regulations to facilitate collaboration between Member States and companies in the sector. Furthermore, Brussels proposes accelerating the transformation of defence through the adoption of disruptive innovations, such as artificial intelligence and quantum technology, which could significantly enhance European military capabilities.

To improve Europe’s preparedness for potential crisis scenarios, the White Paper suggests optimising military mobility, strategic stockpiling, and reinforcing external borders, particularly the land border with Russia and Belarus. These measures are intended to ensure a rapid and effective response to possible security threats across the continent.

The importance of strengthening alliances with like-minded countries worldwide is also highlighted, which would allow the EU to expand its network of security and defence cooperation and collectively address global challenges in this field.

The ReArm Europe Plan

Alongside the White Paper, the European Commission has introduced ReArm Europe, a plan that foresees more than €800 billion in defence investment. One of its key pillars is an invitation for Member States to activate the national escape clause of the Stability and Growth Pact. This measure would allow countries to increase their defence spending by up to 1.5% of GDP per year over a four-year period, providing greater budgetary flexibility to strengthen their military capabilities.

Another initiative under the plan is the creation of a new dedicated instrument called Security Action for Europe (SAFE). The European Commission plans to raise up to €150 billion in capital markets, leveraging its unified financing approach, to enable Member States to rapidly scale up their investments in defence capabilities. These funds would be distributed in the form of long-term loans with competitive and attractive conditions, to be repaid by beneficiary countries. The loans would be backed by the EU budget.

SAFE would allow Member States to immediately increase their defence investments through joint procurement from the European defence industry, prioritising strategic capabilities. This measure would help ensure interoperability, predictability, and cost reduction, thereby strengthening the European defence industrial base. Additionally, Ukraine and countries in the European Free Trade Association (EFTA) and the European Economic Area (EEA) would be able to participate in joint procurement, with the possibility of purchasing from their industries.

Moreover, countries in the EU accession process, candidate states, and EU security and defence partners would be able to join joint procurement initiatives and contribute to aggregated demand. They would also have the option to negotiate specific, mutually beneficial agreements to facilitate the participation of their industries in these processes.

The ReArm Europe Plan also relies on the European Investment Bank (EIB) to expand its lending scope to defence and security projects without compromising its financing capacity. In addition to unlocking a significant amount of funding, this measure would send a positive signal to markets, fostering confidence in the European defence industry.

Finally, the European Commission has adopted the Savings and Investments Union Strategy, which aims to facilitate the mobilisation of private savings into more efficient capital markets. This strategy seeks to channel investments into strategic sectors such as defence for those wishing to invest in them, complementing public investment and addressing the financing needs of the defence industry, from start-ups to large established companies.