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EU Leaders Propose Major Defense Spending Plan as U.S. Halts Ukraine Aid

European Commission unveils €150 billion loan program and budget rule changes to bolster defense, responding to U.S. withdrawal of military support for Ukraine.

European Commission President Ursula von der Leyen delivers a statement on plans to strengthen the European defence industry and the EU's military capabilities, in Brussels, Belgium March 4, 2025. REUTERS/Yves Herman
Europe’s leaders rallied around Ukraine as the bloc pledged to beef up defense spending.

Overview

  • European Commission President Ursula von der Leyen announced a €150 billion loan program to fund defense projects, part of a broader plan to mobilize up to €800 billion in military spending over the coming years.
  • The proposal includes loosening EU budget rules to allow member states to increase defense spending without breaching deficit limits, addressing long-standing reliance on U.S. military support.
  • The U.S. decision to suspend military aid to Ukraine, following a contentious meeting between President Trump and Ukrainian President Zelensky, has intensified pressure on Europe to fill the gap in support.
  • EU leaders are expected to discuss options for providing Ukraine with additional military resources, including seizing frozen Russian assets, though legal and financial hurdles remain.
  • The defense plan signals a significant policy shift for the EU, traditionally focused on peace and economic development, as leaders emphasize the urgency of addressing security threats from Russia.