EU Chief Urges Member States to Prioritize European Defense Purchases Over American Options with New Loan Initiative

"EU Chief Calls for Focus on European Defense Purchases with New Loan Plan"

EU countries must buy European-made military equipment under a new €150 billion loan program to enhance their defense capabilities and industry.

Alex Chen11 March 2025Last Update : 19 hours ago

EU chief says member countries must use a new defense loan to buy European, not American

apnews.com

On March 11, 2025, in Brussels, European Union Commission President Ursula von der Leyen announced that EU countries must utilize a new 150 billion euro loan program to purchase military equipment from European manufacturers. This initiative aims to enhance the continent’s defense capabilities, despite the fact that two-thirds of current orders come from U.S. suppliers.

6 Key Takeaways

EU to purchase military equipment from Europe
New loan program worth 150 billion euros
Focus on air defense, drones, cybersecurity
Contracts should be multiannual for predictability
France demands more funding for the plan
EU leaders to endorse loan plan soon

Von der Leyen emphasized the importance of multiannual contracts to provide predictability for the defense industry and encouraged collaborative purchasing among member states to strengthen their collective security.

Fast Answer: EU leaders are set to approve a 150 billion euro loan program aimed at boosting European military production. The initiative requires member countries to purchase defense equipment from European suppliers, responding to concerns over reliance on U.S. defense contracts. France advocates for increased funding, while Spain prefers grants over loans.

The new loan program is part of a broader strategy to enhance Europe’s defense industry and reduce dependency on external suppliers. The European Commission’s proposal, discussed at a recent summit, aims to finance purchases of air defense systems, drones, and cybersecurity enhancements. This initiative is expected to benefit around 20 EU countries, particularly those facing higher borrowing costs.

Key details of the loan program include:

Value: 150 billion euros ($163 billion).
Focus: Equipment purchases from European producers.
Expected impact: Strengthening defense capabilities across the EU.

France has called for increased funding for the program, insisting that all expenditures remain within Europe. Meanwhile, Spain, which has a high debt level, is advocating for grants instead of loans to support its military needs. The EU leaders are expected to endorse this plan at their upcoming summit, which is part of a larger effort to generate up to 800 billion euros ($874 billion) for security priorities.

Notice: Canadian readers should note that the EU’s shift towards enhancing its defense industry may influence global defense markets, including potential impacts on Canadian defense procurement and partnerships.

This initiative marks a significant step towards strengthening the EU’s defense autonomy and reducing reliance on U.S. military supplies. By encouraging joint purchases and long-term contracts, the EU aims to bolster its defense industry while addressing security concerns heightened by geopolitical tensions.