Bloomberg: EU Unexpectedly Found Additional Funds For Defense
- 18.06.2025, 11:58
The budget can grow quickly.
The EU intends to adopt the European Defense Industry Program (EDIP) before the meeting of the countries' leaders in Brussels at the end of June. The instrument will serve as a vehicle for future funding of the bloc's defense.
This is reported by Bloomberg.
Although it seems small - just 1.5 billion euros from the EU's 2025-2027 budget - it could grow quickly. According to Bloomberg, the European Commission is offering member states the option of directing unspent money for pandemic recovery to the fund.
What remains to be decided is the level of openness to using those resources to buy U.S. weapons, a sensitive issue given the delicate trade negotiations with Washington, the agency wrote.
The EU faces a military threat from Russia three years after Moscow's troops invaded Ukraine. It comes at a time when the US - its traditional guarantor of security - is renegotiating the post-war order under President Donald Trump.
As NATO members pledge to increase defense budgets, the 27-member EU is seeking a stronger security framework in a rapidly changing geopolitical environment.
The European Commission is receiving applications for a €150 billion loan fund to boost defense spending. Another 650 billion euros will potentially be available to member states under a new mechanism that allows countries to draw down more funds from national budgets over four years without penalty.
Officials also want to simplify the process of distributing funding allocated to the European Defense Fund, the commission's tool for supporting research and development. The fund started operating in 2021 with a budget of about 7.3 billion euros until 2027.
The EU Covid Fund (officially: NextGenerationEU) is a temporary recovery fund set up by the European Union in 2020 to tackle the economic and social impact of the COVID-19 pandemic.
Fund size: about 807 billion in euros (in 2018 prices), of which the majority is grants and loans to EU member states. Main instrument: the Recovery and Resilience Facility (RRF), which amounts to more than 720 billion euros and finances reforms, digitalization, green economy, health and education.