Media: EU members give initial backing to €150 billion defence fund

The European Union’s 27 member states have given preliminary approval to a €150 billion defence fund aimed at strengthening the bloc’s security capabilities, with formal endorsement expected next week.

The initiative will support investments in areas such as ammunition, drones, and the protection of critical infrastructure, according to individuals familiar with the discussions, Caliber.Az reports, citing Bloomberg.

The programme was proposed by the European Commission in March as part of a broader response to the scaling back of US security commitments in Europe under President Donald Trump. It complements new fiscal rules that allow greater flexibility for defence spending, which could unlock up to €800 billion across the bloc.

Under the plan, the Commission will raise the €150 billion on capital markets and disburse the funds as loans to member states to finance targeted defence projects. Priority will be given to critical shortages, including missiles, ground systems, and missile defence technology.

Non-EU countries will also be eligible to participate, provided their contribution does not exceed 35% of the total cost. Following a new defence partnership agreed on May 19, the EU has committed to exploring options for UK participation in the scheme.

The loan facility will be modelled on a previous EU instrument established during the COVID-19 pandemic to support national short-time work schemes.

Commission President Ursula von der Leyen has called the initiative a “once-in-a-generation moment,” and has estimated the EU’s defence investment needs at around €500 billion over the next decade.

By Aghakazim Guliyev