‘Europe’s moment:’ EU unveils $843B ‘ReArm Europe’ spending plan, as US-Ukraine relations flail

Ursula von der Leyen delivers an announcement on a new $843 billion EU defense package (European Commission)

BELFAST — As allies brace for the US to cut military funding for Ukraine, the European Union announced today a new €800 billion ($843 billion) package to “rearm” the continent, dubbed ‘ReArm Europe.’

Unveiling the plan, European Commission President Ursula von der Leyen, was blunt, saying, “We are in an era of rearmament. And Europe is ready to massively boost its defense spending.”

“This is Europe’s moment, and we must live up to it,” she added.

Coincidentally or not, the announcement comes on a day when President Donald Trump will address the US congress, and as multiple reports say Washington has decided to cut off military aid and may stop the transfer of weapons to Ukraine following an explosive meeting in the Oval Office between Trump, Vice President JD Vance and Ukraine President Volodymyr Zelenskyy.

ReArm Europe funding will be dependent on securing €650 billion over four years by triggering a “national escape clause” that suspends budget rules, allows national governments greater flexibility over public funding and could produce, on average, a 1.5 percent defense spending increase per member state.

A “new instrument” offering €150 billion of loans to member states would be responsible for delivering the remainder of the funding.

Additionally, member states will be able to redirect funding from other EU projects to increase defense related efforts.

Von der Leyen stressed that the rearmament project rests on “spending better – and spending together,” while at the same time will focus on developing “pan-European capability domains.”

She referred specifically to ammunition, air and missile defense, artillery systems, drones and missiles as weapons that Europe needs to invest in.

“Of course, with this equipment, Member States can massively step up their support to Ukraine,” she added.

The rearmament plan also signals a stronger joint procurement push by the EU, which von der Leyen said will “reduce costs, reduce fragmentation increase interoperability and strengthen our defense industrial base.”

European officials voiced strong support for von der Leyen’s rearmament plan.

On X, Greek prime minister Kyriakos Mitsotakis labelled it a “significant step toward strengthening our collective European security.” He added, “We must now work out the details to ensure that all member states benefit—regardless of their current defense spending.”

Similarly, Annalena Baerbock, Germany’s outgoing foreign minister, said the initiative was an “important first step” in strengthening Europe defense.

More broadly, the level of spending proposed under ReArm Europe is directly in line with calls from industry to urgently move the needle.

Last month, Saab CEO Micael Johansson, told Breaking Defense that if the European Defence Industry Programme (EDIP) could not go beyond a proposed budget of €1.5 billion and reach “hundreds of billions” then a “coalition of the willing” should be formed to fund major equipment projects and scale up production.

Supporting Ukraine, Without The US

Von der Leyen’s announcement comes two days before European leaders gather for a “special” European Council meeting in Brussels to discuss additional support for Kyiv and “exchange views on European contributions to the necessary security guarantees required to ensure a lasting peace in Ukraine,” according to an EU statement.

Since Friday’s explosive meeting in the Oval Office, Europe has been scrambling to come to grips with the reality that it may be alone in challenging Russia. That means any strategy needs to not only involve improving individual state defenses, but also helping to support Ukraine going forward.

Whether Europe can step up and fill that void is very much a question, one on display Tuesday morning at a a UK defence committee hearing on European security.

Julian David, CEO at TechUK, said that even outside of obvious heavy equipment like ATACMS, Patriot and HIMARS, the MoD would be unable to replace US communications and “information, surveillance and reconnaissance” capabilities.

He added, “Everybody talks about Starlink, but it’s a broader problem than that, and that really does need thinking about, even at the level of GPS.”

Kevin Craven, CEO of ADS Group, said that production of ammunition across Europe would effectively need to double in order to make up for the absence of US stocks. “That’s a big ask,” he explained.