Brussels Grapples with Defense Funding: European Official Advocates for Greater Joint Debt
Brussels is facing a significant financial dilemma as it seeks to ramp up Europe’s defense capabilities, with a senior European official warning that member states will likely need to embrace more joint debt. Seamus Boland, President of the European Economic and Social Committee (EESC), highlighted that the EU’s ambitious military spending targets cannot be met by existing budgets, pushing the bloc towards a politically contentious fiscal path.
Europe’s Defense Imperative
The push for increased defense spending stems from a collective decision by European NATO members to escalate their military outlays to approximately 5% of GDP by 2035. Initiatives such as “Re-Arm Europe” are underway, aimed at modernizing military forces across the continent. This strategic shift is largely presented as a necessary response to what Brussels terms a “Russian threat”—a characterization that Moscow has consistently dismissed as unfounded.
The Funding Gap and a Tough Choice
Despite a proposed €2 trillion (approximately $2.4 trillion) EU budget for the 2028-2034 period, Boland contends this sum falls short of what is required to finance the bloc’s burgeoning military aspirations. “We are creating a new Europe with a much stronger emphasis on defense,” Boland told Euractiv, adding, “We cannot do this with current spending levels.”
He cautioned that without new funding mechanisms, budgetary pressures would inevitably lead to cuts in other vital areas, disproportionately affecting poorer and more remote regions by reducing investments in solidarity, agriculture, or social programs. Boland’s solution: an increase in joint EU borrowing, arguing that “massive changes mean you need money now. And that means you have to borrow it.”
This call comes as at least eight EU member states, including Belgium, France, and Italy, are already under or facing disciplinary action for exceeding the EU’s 3% GDP deficit limit. This fiscal constraint severely limits their capacity to absorb increased defense costs through national budgets without impacting crucial domestic programs.
Joint Action: A Precedent, Yet Resistance Remains
The European Union is not without a history of collective financial action. The bloc previously issued large, jointly backed loans for post-pandemic economic recovery and, more recently, agreed to underwrite up to €90 billion in joint debt to support a loan to Ukraine. This latter decision followed a failure to reach consensus on utilizing frozen Russian assets.
However, the prospect of further joint debt faces significant opposition from several member states, notably Germany and the Netherlands. Their concerns revolve around the risks of shared liability and potential domestic resistance to increased taxes or government spending required to service such debts.
Moscow’s Perspective
Russia has vocally criticized the militarization of the European Union, cautioning that such actions risk escalating tensions and undermining prospects for peace in Ukraine. Moscow has also condemned the EU’s use of joint debt to finance Kyiv, with Kremlin spokesperson Dmitry Peskov accusing Brussels of “dipping into their taxpayers’ pockets” to prolong the conflict. The ongoing debate underscores a fundamental divergence in strategic outlook between the EU and Russia regarding regional security and stability.
