A 150 billion euros (US$169 billion) loan program to rearm Europe that was finalized this week could be “a very important breakthrough” in the EU’s military support for Ukraine, the bloc’s defense commissioner said.
European Commissioner for Defense and Space Andrius Kubilius, who is also a former Lithuanian prime minister, said he expected a lot of member states to request EU-backed loans under the 150 billion euros Security Action for Europe (SAFE) scheme, which was approved on Wednesday.
The European Commission proposed the 150 billion euro loans alongside flexibilities in the bloc’s fiscal rules as part of an 800 billion euros rearmament plan, which was hastily drawn up after US President Donald Trump’s decision to suspend all US military aid to Ukraine.
Photo: AP
Once the loans agreement is rubber-stamped next week, EU member states have six months to draw up plans for defense projects they wish to fund.
“Member states will take those loans …. and will use them for joint procurement together with Ukraine and for Ukrainian needs,” Kubilius said.
British defense companies would also have greater opportunities to be involved in defense projects funded by the scheme as a result of the EU-UK security pact signed on Monday, as part of British Prime Minister Keir Starmer’s broader reset of relations.
The UK and the EU are expected to sign a technical agreement on SAFE that would require a yet-to-be determined administrative fee from London. However, the British government does not intend to seek access to the EU-backed loans, which are designated for EU member states.
Kubilius said this week’s agreement with the UK had a historic strategic meaning: “It is impossible to imagine [Europe’s security] architecture from one side without Great Britain, from the other side without Ukraine,” he said, referring to the immediate threat from Russia and long-term challenge of the US shifting resources to the Asia-Pacific region.
“We cannot complain that 340 million Americans are not ready forever to defend 450 million Europeans against 140 million Russians,” he said, playing down European differences with the Trump administration.
“We can dislike language and messages, but what we need to avoid really is what I call angry and chaotic divorce [with the US]. We need to go into a very rational agreement on a division of responsibilities,” he said.
He expressed confidence that EU member states would deepen national debts to spend the 800 billion euros of possible defense spending identified by the commission.
So far, 15 countries, including Germany and Poland, have announced they intend to use the flexibilities in the EU’s fiscal rules, but several large and heavily indebted economies have held back, including France, Italy and Spain. These countries, which are among the least generous donors to Ukraine, are thought to be reluctant to increase their debts for defense. Consequently, some Brussels insiders remain skeptical that the EU would meet the 800 billion euros headline figure.
However, the EU commissioner said Europe could fill any shortfall in US military aid for Ukraine.
By the third anniversary of Russia’s full-scale invasion of Ukraine in February, Europe had provided Ukraine with 62 billion euros of military aid, compared with 64 billion euros from the US, according to data compiled by the Kiel Institute for the World Economy.
Europe had also sent 70 billion euros in humanitarian and financial aid, compared with 50 billion euros from the US. To replace US aid flows, Europe would need to spend 0.21 percent of GDP, according to the Kiel Institute, compared with what its analysts described as the “minor effort” of 0.1 percent of GDP being spent today.
An additional 0.1 percent “of course, is not zero, but also it is not something which would destroy our financial situation,” Kubilius said.
However, he reflected European politicians’ widespread sotto voce skepticism of Trump’s efforts to broker an agreement with Ukraine, saying it was an “illusion” that Russian President Vladimir Putin wanted peace.
“The way to achieve a just peace is really to implement formal peace through strength,” he said.
Kubilius, who lived half his life in the Soviet Union, said changes in Russia could be unpredictable. He believes Putin launched his war on Ukraine because he feared its attempts to move away from autocracy would inspire a movement for democratic change in Russia.
“Ukrainian success is ... from [Putin’s] point of view, the biggest danger,” he said.
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