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Leaders of the 27 EU countries have agreed in principle to a massive increase in defence spending at a summit that was hastily organised in the wake of Donald Trump’s withdrawal of support for Ukraine.
Talks over European Commission president Ursula von der Leyen’s €800 million (£670 million) military spending package went on for ten hours before an agreement could be reached. And while the deal is in place, leaders can’t agree on how to finance it.
With pressure from the United States to increase their contribution to Nato, European states have also agreed to increase defence spending as a share of their GDP.
Many EU countries wanting to spend more on defence argue they can’t afford to do so because they are already struggling with government debt. However, France has the largest debt as a proportion of its GDP in the EU and is still increasing defence spending.
The challenge for nearly all EU member states has been how to go about spending more on defence without over-borrowing and putting the euro currency in danger through government defaults on existing loans.
The European Commission has set out new funding for defence industries which could lower the cost of defence procurement for EU member states. However, the EU doesn’t have enough funds to sustain a high level of defence investment.
Hungary and Slovakia have stated that they are not interested in an EU defence budget. They would rather see individual member states increase their budgets. Both Hungary and Slovakia are resistant to EU calls to further isolate Russia over the war in Ukraine.
Hungarian president Viktor Orbán was the holdout at the Brussels meeting. Orbán has been far more lenient than others on Moscow since the start of the war.
Slovakia’s prime minister, Robert Fico, wants a more constructive relationship with Russia and the return to the supply of natural gas that is piped through Ukraine. He did, however, ultimately fall in behind other member states at the Brussels meeting.
Now that a package has been agreed, the challenge for European leaders and the EU is how to grow defence budgets without breaking the budget, forcing many governments into determining what they are not going to spend money on even before they can figure out how to grow defence spending.
The nuclear dilemma
At the summit, French president Emmanuel Macron also presented a plan to bring other European nations under France’s nuclear umbrella, effectively making France’s deterrent their joint deterrent.
The rationale here is the concern that the US could withdraw from Nato or at least water down article five, the commitment by Nato countries to treat any attack on a member state as an attack on all member states. Doing so would mean Europe could no longer rely on the US nuclear deterrent for protection.
But while European countries want to prepare for a potential US withdrawal, they also don’t want to signal to Washington that the US deterrent is no longer needed. In fact most European Nato countries would like the US to maintain its nuclear posture in Europe and are working hard on a diplomatic level with Washington to slow the retreat.
At the same time, European member states want security guarantees so talks on Macron’s proposal will continue.
European support for Ukraine
The EU showed renewed commitment for Ukraine at the summit with meetings between Ukrainian president Volodymyr Zelensky and several European and EU leaders.
A joint statement was agreed, stressing that peace talks must include Ukraine and confirming the EU’s support. Orbán was, again, the only leader not to sign up to the statement.
The hope is that, with these actions, Europe can pressure the Trump administration to continue to engage Ukraine as it seeks a peace with Russia. But it is unclear how much of an impact such European solidarity for Ukraine will have.
Europe cannot be ready for a new defence reality overnight but this defence summit has been a good start. Now the really hard work begins.
David J. Galbreath has received funding from the ESRC, AHRC, British Academy and Leverhulme Trust.
