The News
European Commission President Ursula von der Leyen said Tuesday that the bloc’s governments must spend a proposed €150 billion defense fund on weapons from European manufacturers, as Europe attempts to insulate itself from a US pullback.
“These loans should finance purchases from European producers to help boost our own defense industry,” von der Leyen said.
France and Germany — the EU’s largest economies — have disagreed over how the defense fund should be spent: Paris wants to limit US weapons purchases. Berlin, perhaps in acknowledgement of the deep connections between European and US defense firms, has demanded more flexibility.
The announcement comes as Europe scrambles to rearm itself and retain influence over the outcome of Russia’s war in Ukraine. France’s president is meeting with heads of 30 EU and NATO nations’ militaries Tuesday, while the UK prime minister will host a virtual conference of world leaders on Saturday.
SIGNALS
Trump is driving progress on European defense...
Analysts are divided over whether Europe’s rearmament campaign will have a tangible effect: US President Donald Trump’s rapprochement with Russia, uncertainty over NATO, and criticism of Ukraine “has had a galvanising effect” on European defense and diplomacy, the Financial Times’ chief foreign affairs commentator Gideon Rachman wrote. But writing in Unherd, Wolfgang Münchau countered that Europeans still lacked strategic foresight, and appear to be deploying “ostentatious symbolism” instead. Europe requires “sustained unity,” a Chatham House analyst wrote: So far, only the UK and France have committed to sending peacekeeping troops to Ukraine.
But Europe will still struggle to fill the US defense void
Even if Europeans agreed to send troops to Ukraine, they would struggle to recruit enough of them, the BBC noted: “Europe, on its own, would not be able to provide a force of 100-200,000 international troops” that Ukraine has said it needs to deter Russia. Money is not the only problem, The Economist wrote: “Europe emptied its military stockpiles early in the war,” and it doesn’t have the production capacity to rapidly replace US weapons supplies. European nuclear power, too, is lacking: The current French and British deterrent “would not constitute a viable solution in the event of an abrupt withdrawal of US nuclear forces,” an analyst at the Center for Strategic and International Studies said.
Defense surge could boost Europe’s flagging economy
European defense firms have emerged as “one of the biggest winners in global markets this year,” The Wall Street Journal wrote. Buoyed by Germany’s recent defense spending announcement, shares in the country’s Rheinmetall — which manufactures tanks and munitions — have surged in value by more than 90% this year. Higher defense spending could boost the European Union’s GDP by 0.5% over the next two years, Goldman Sachs economists wrote in a recent report, although “it’s very important that this extra spending is deployed consistently over time,” one economist told Reuters.