European leaders are under huge pressure to increase defence spending as U.S. President Donald Trump’s return to power has delivered a rude wake-up call that they cannot blindly rely on Washington.
“It will help Member States to pool demand and to buy together. This will reduce costs, reduce fragmentation increase interoperability and strengthen our defence industrial base,“ Commission President Ursula von der Leyen said.
EU leaders will discuss the proposal at a special summit devoted to defence spending on Thursday.
“If Member Sates would increase their defence spending by 1.5% of GDP on average this could create fiscal space of close to 650 billion euros,“ von der Leyen said.
All these elements could provide up to 800 billion euros for EU governments to spend on defence projects.
The Stoxx Europe Aerospace and Defence index rose on the news.
He has also paused military aid to Ukraine following his clash with Ukrainian President Volodymyr Zelenskiy last week, leaving Europe trying to figure out how to react.
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