Out-Law News Lesedauer: 1 Min.
European defence needs ‘require close working relationships’
10 Mar 2025, 9:39 am
Recent developments across the European Union and more widely have led to member states taking immediate action to address defence and security issues, with a special European Council meeting called to discuss collective plans.
The meeting held yesterday focused on the situation in Ukraine and possible implications for future European defence spending plans. The meeting saw leaders discuss Russia’s current positioning, while building on previous discussions in order to formulate possibilities for strengthening and financing Europe’s strategic approach to defence.
Andrew Brydon, defence projects expert at Pinsent Masons, said: “European nations have collaborated in relation to defence matters in different ways in recent years, but there is now a clear wish to do so at a new level. This will lead to opportunities for nations to develop closer working relationships and of course for contractors and developers of new technology to help achieve these ambitious objectives.”
The meeting follows a letter from Commission president Ursula von der Leyen (5 pages/283 KB), issued on Tuesday, outlining five pillars for the ‘ReArm Europe plan’. The plan will allow for a new EU financial instrument to support member states in boosting defence capabilities. It will also unleash the use of public funding in defence, incentivising defence-related investments in the EU budget along with contributions by the European Investment Bank as well as mobilising private capital.
During the meeting, most EU leaders pledged their support to progressing the plan, welcoming the Commission’s increase in spending and loosening of the fiscal rules applicable to member states.
The Commission will now be tasked with doing more work on the ReArm Europe plan ahead of another meeting in the coming weeks.
European increases in defence spending come as the US reconsiders its own expenditure and wider policy objectives, not only in relation to Ukraine. European leaders are signalling the possibility of prioritising greater independent defence capability. For instance, French president Emmanuel Macron recently indicated that France would gear up its nuclear deterrent.
William Hall, public policy expert at Pinsent Masons, said: “The geopolitical situation is changing rapidly, and businesses can expect European economies to adjust to meet these challenges. The increasing prioritisation of defence spending is likely to have a major influence on the political and economic choices for governments over at least the next few years.”
The French president's comments follow announcements from other countries including the UK. Prime minister Keir Starmer set out a commitment to increase spending on defence to 2.5% of GDP from April 2027, with aims of a further increase to 3% in the next parliament. This commitment reflects the biggest investment in defence spending in the UK since the Cold War.
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