Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The European Commission is seeking to set up collective arms purchasing for the entire bloc, in what would represent a significant transfer of power to Brussels.
Ursula von der Leyen, head of the EU’s executive, said on Tuesday that the bloc would set up a “European Military Sales Mechanism” — a strategic reserve of European weaponry that capitals could purchase from to refill their own inventories.
The initiative is part of the continent’s rearmament drive and aims to provide additional orders for arms manufacturers which have struggled to scale up production despite Russia’s war in Ukraine. France and Germany have also announced more investment in their domestic weapons industries.
“We must buy more European [weapons],” von der Leyen said in a speech in Copenhagen. “That means creating an EU-wide market for defence equipment.”
US President Donald Trump’s threats to withdraw protection to Nato allies and his bilateral peace negotiations with Moscow have spooked European capitals and promoted a rush to increase the continent’s domestic defence capabilities.
On Tuesday, the German parliament approved plans to inject up to €1tn into the country’s military and infrastructure — in a landmark decision spearheaded by the country’s chancellor-in-waiting Friedrich Merz.
Economists have estimated that Germany’s armed forces need more than €400bn in coming years, funding that is likely to be unleashed by Merz’s reform, which will also loosen the country’s strict borrowing rules.
French President Emmanuel Macron on Tuesday announced additional military spending, including more government orders for Rafale fighter jets and a €1.5bn investment in an air base which will become part of the nuclear deterrent by 2035, when it will host new versions of the aircraft equipped with hypersonic atomic missiles.
Von der Leyen said EU countries “need to be able to fully rely on European defence supply chains, especially in times of urgent need. And a European market would deliver that.”
Giving Brussels such powers would mark a significant transfer of competences from national capitals, which have previously insisted on having the last say on matters of national security. Von der Leyen’s proposal would need to win support from a majority of member states to come to fruition, officials said.
But EU leaders had already signalled support for joint procurement at a summit earlier this month, said a senior official. Buying weapons together would enable European armed forces to scale up in “a coherent, standardised, interoperable way”, the official added.
“Our industrial base still has structural weaknesses. It is not yet able to produce defence systems and equipment in the quantities and speed that member states need,” von der Leyen said. “We need to turn the tide. It starts with investment in Europe.”
The remarks come a day ahead of the release of a defence strategy drafted by the commission that is set to propose that the commission act as a centralised buyer of military equipment.
The collective purchasing proposal comes alongside a raft of new financial ideas from von der Leyen aimed at encouraging EU countries to increase their defence spending.
She has proposed a new €150bn fund for capitals to invest in their armies, lifting EU fiscal deficit rules when applied to military spending, and redirecting existing funding streams from the EU budget to defence-related projects.
Additional reporting by Anne-Sylvaine Chassany in Berlin and Ian Johnston in Paris
Read the full article here
