This week, the European Commission (EC) will present a White Paper on the future of European defense, outlining guidelines for increasing production and defense readiness in the face of a potential military threat from Russia. According to the ReArm Europe plan, €800 billion is expected to be allocated to defense over the next four years.
However, MEP Bogdan Rzońca is skeptical about the feasibility of these commitments.
“The EC’s actions are ideological announcements and theoretical promises. The European Union is currently facing a severe financial crisis, and there is simply no money for defense,” he stated.
The White Paper, expected to be released by March 19, will expand on the rearmament plan introduced by European Commission President Ursula von der Leyen. The five-point plan aims to mobilize up to €800 billion for defense in the coming years, including a €150 billion loan instrument for EU member states to finance joint defense and security procurements. Von der Leyen has emphasized that these measures are essential for Europe’s security.
Financial Concerns Cast Doubt on Defense Plans
Despite these ambitious proposals, financial obstacles remain. Rzońca highlights a major problem with funding the plan:
“In theory, this document is important. However, in practice, there is an enormous issue with securing the necessary funds for defense. The European Commission does not have the €800 billion it plans to distribute, and that is the EU’s greatest dilemma. They are talking about a €150 billion loan, guaranteed by the EC, but the remaining €650 billion must be found by national governments.”
His concerns are echoed by the Dutch Parliament, which recently voted against the EU defense plan. The motion, led by the right-wing JA21 party, was supported by three out of four coalition parties, citing opposition to Eurobonds and fiscal rule relaxations as the main reasons.
“The European Commission is making itself look ridiculous by promising money that simply doesn’t exist,” Rzońca added.
“They talk about building an eastern flank from Helsinki to Athens, but I ask—where is the money, and who has agreed to this?”
EU’s Growing Debt Crisis
Reports from the European Court of Auditors highlight the EU’s growing financial crisis. Rising inflation and increased financial aid to Ukraine have raised alarm bells, with EU debt levels reaching record highs.
- At the end of 2023, total EU liabilities stood at €543 billion, up from €452.8 billion in 2022.
- The primary cause is the Next Generation EU (NGEU) recovery fund, with €268.4 billion in outstanding loans.
- The EU’s debt is now twice as high as in 2021 (€236.7 billion), making the bloc one of Europe’s largest debt issuers.
Rzońca warns that repaying this debt is becoming an increasingly pressing challenge.
“There is a huge problem with repaying the Recovery Plan loans. Two months ago, von der Leyen said that we need €30 billion to cover debt repayments starting January 1, 2028. But that money does not exist. Where will it come from? National governments have already stated that they will not contribute an extra euro.”
€800 Billion Investment Gap and Uncertain Future
The European Union faces a serious investment gap that could reach €800 billion between 2025 and 2030. According to EC estimates, starting from 2028, the EU will need to begin repaying capital and interest on recovery fund loans, with an estimated €25–30 billion per year required—nearly 20% of the current annual budget.
Rzońca also criticizes the new taxes proposed by the European Commission, arguing that their implementation will be difficult.
“The Carbon Border Adjustment Mechanism (CBAM), also known as the carbon tax, may never come into effect. So while the EC is struggling to define its long-term financial framework, it is simultaneously promising to spend €800 billion that it simply does not have.”
As financial uncertainty deepens, skepticism grows over whether the EU’s defense ambitions can be realized without a clear and sustainable funding strategy.
