The European Union is considering changes to its spending policy to redirect a significant portion of its cohesion funds to defence and security, given the protracted conflict in Ukraine and the threat of Donald Trump’s return to the US presidency, the Financial Times reports. The revision of the bloc’s budget concerns about a third of its funds – almost €392 billion for the period from 2021 to 2027 – which are traditionally used to tackle economic inequality between member states.
Currently, under the current rules, the funds cannot be used to purchase defence equipment, but investments in dual-use projects such as drones are allowed. However, Brussels now plans to give member states more flexibility to allocate funds to support their defence industries and increase troop mobility, for example by strengthening the infrastructure needed to move military equipment.
New security investments welcome in Eastern Europe
The changes have already been welcomed by eastern EU members, who, like Poland and Lithuania, have significantly increased their military spending since Russia’s invasion of Ukraine. “We need to invest in military mobility projects that are critical not only for our country but also for the region,” said Lithuanian Finance Minister Gintare Skeiste.
Poland, which already spends 4.1% of its GDP on defence, continues to put pressure on Brussels to provide even more funding for the defence sector. This is double the NATO target, and the country plans to raise this figure to 4.7% by 2025.
Trump’s warning and the risk of new tensions
This initiative is in line with the warnings of Trump, who has previously threatened NATO allies that he would allow Russia to act at its own discretion if Allies do not increase their defence spending. His potential return to the White House is pushing European countries to reconsider their approach to collective security and defence spending.
The EU plans to start discussing a new budget with a focus on security and defence as early as next year, and according to a report by former Finnish President Sauli Niinistö, it has been proposed to allocate 20% of the EU budget to defence.
