France and Germany are arguing over a 150 billion euro plan for EU defense – FT

The proposed injection of 150 billion euros into the EU defense industry has become a new “hot spot” in the long-standing battle between France and Germany over the rearmament of the continent and whether countries outside the bloc should be included, reports the Financial Times, writes UNN.

Details

Frightened by threats from U.S. President Donald Trump to end generations of American protection, Europe has promised to sharply increase defense spending and bolster its domestic capabilities, which have shrunk since the Cold War, the publication writes.

Last week, the European Commission proposed to allocate 150 billion euros, which will be provided as loans to member states to stimulate their military production. While the common idea received unanimous political support, the details are still being worked out, and there is active lobbying on whether the money can be spent on weapons made outside the bloc.

During the EU summit on Thursday, several leaders, including German Chancellor Olaf Scholz, stated that the initiative should be open to like-minded countries outside the EU. “It is very important for us that the projects that can be supported by this are open to countries that are not part of the European Union but cooperate closely, such as the United Kingdom, Norway, Switzerland, or Turkey,” Scholz said.

However, French President Emmanuel Macron, who has long supported increasing European autonomy and stimulating domestic industrial production, stated that “spending should not be directed towards new ready-made kits that are again not European.”

For gaps in Europe’s critically important capabilities – including air defense, long-range strikes, intelligence, reconnaissance, and targeting – “the method is to identify the best businessmen and enterprises we have,” he added.

He also said that each EU member state will be invited to “review orders to see if European orders can be prioritized.”

Brussels diplomats are concerned that the 150 billion euro initiative will be derailed by the same argument that has delayed the agreement on the European Defence Industry Programme (EDIP) for over a year, a fund of 1.5 billion euros that allocates grants for defense. Efforts to implement it stalled this winter after Paris demanded to limit the share that could be spent on components from outside the EU and to ban products with intellectual property protection from third countries.

Senior officials of the European Commission, tasked with developing a detailed proposal within the next 10 days, have been called to closely interact with Paris, Berlin, and other capitals to ensure that it is not blocked when presented for approval by member states, the publication writes.

“A lot of work needs to be done on this issue. It wasn’t there a week ago, and it needs to be prepared in less than two weeks,” said an EU representative. “Compromises will be reached.”

The Polish government, which currently holds the EU presidency and is tasked with chairing the bloc’s ministerial meetings, will be under pressure to produce a quick deal, the publication writes. The initiative can be approved by a majority of the 27 EU states, but French support is seen as necessary, even if the country may find itself in the minority – as the EDIP precedent shows.

“We are at a stage where it just needs to be settled in the name of speed rather than perfection,” said an EU diplomat involved in the negotiations. “But if there was reluctance to invest 1.5 billion euros past France’s objections, how can we expect to get 150 billion euros?”

The European Commission declined to comment.

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