EU slams the door on US in colossal defense plan

United States arms-makers are being frozen out of the European Union’s massive new defense spending plan, which aims to splash the cash for EU and allied countries, according to defense spending plans released Wednesday.

Also left out — for now — is the United Kingdom.

“We must buy more European. Because that means strengthening the European defense technological and industrial base,” said Commission President Ursula von der Leyen in announcing the Readiness 2030 program.

In a bid to strengthen ties with allies, Brussels involved countries like South Korea and Japan and the European Free Trade Association (EFTA) in its program that could see as much as €800 billion spent on defense.

“We need to see not only Russia as a threat, but also … more global geopolitical developments and where Americans will put their strategic attention,” European Defense Commissioner Andrius Kubilius told reporters.

In recent years, about two-thirds of EU procurement orders have gone to U.S. defense companies.

The Commission presented its long-term defense policy proposal, known as a white paper, as well as a raft of legislative proposals aimed at making it easier for countries to boost military spending and to create a more integrated defense market in the bloc.

“We’re not doing this to go to war, but to prepare for the worst and defend peace in Europe,” said Kaja Kallas, the EU’s top diplomat.

The threat from Russia is the main driver for strengthening the continent’s military-industrial complex — but shifts in the U.S. under President Donald Trump are also forcing the EU to move fast.

The danger of relying too much on the U.S. was highlighted by Trump’s sudden decision to undermine allied Ukraine by halting arms deliveries and intelligence-sharing to pressure Kyiv into accepting peace talks with Russia.

Kallas pointed to how Kyiv has been hampered by relying on outsiders. “They use weapons that are not produced in Ukraine [and] sometimes there are limitations on how they can use those weapons … your military needs to really have free hands in this regard,” she said.

The EU strategy underlined that while the United States is “traditionally a strong ally,” it added that Washington “believes it is over-committed in Europe and needs to rebalance, reducing its historical role as a primary security guarantor.”

Allocating the money

The most concrete proposal is a Commission pledge to lend up to €150 billion to member countries to be spent on defense under the so-called SAFE instrument.

While the loans will only be available to EU countries, friendly states from outside the bloc may also take part in joint weapons purchases.

Joint procurement under the SAFE proposal is open to Ukraine; EFTA’s Norway, Switzerland, Iceland and Liechtenstein; as well as “acceding countries, candidate countries and potential candidates, as well as third countries with whom the [European] Union has entered into a Security and Defence Partnership.”

As of the end of January, the EU had six defense and security partnerships: with Norway, Moldova, South Korea, Japan, Albania and North Macedonia.

Turkey and Serbia, as EU candidate countries, could also potentially join.

That leaves out the U.S. and the U.K. — although Britain’s status could change. “We are working on having this defense and security partnership with U.K. I’m really hoping that for the summit which is in May, we can have results,” Kallas said.

Canada has also made clear it wants a tighter security relationship with the EU. The Commission on Wednesday also floated greater defense cooperation with Australia, New Zealand and India.

“There are lot of requests across the globe to cooperate with us,” said a senior EU official.

The preferential treatment for European companies is a bid to appease France, one of Europe’s leading arms producers.

In a further attempt to tighten the screws on non-EU companies, the deal bans foreign countries from accessing classified information.

It also sets a minimum threshold that 65 percent of the components eligible for funding must be European, with that definition including Ukraine and Norway. The planned fund would exclude weapons systems where a non-EU country has design authority — meaning controlling its constructions or use. That would seem to cover most joint ventures producing U.S. military equipment in the EU.

The loans will finance joint projects by two or more members in a bid to create an EU-wide defense industry. “We do away with fragmentation precisely by incentivizing member states to get together” and buy the same weapons at a better price, said an EU official.

In an attempt to kickstart arms purchases immediately, the Commission will allow EU countries to place orders individually for the first 12 months.

The plans released Wednesday also allow EU member countries to get around the bloc’s strict budget limits. They will be able to overshoot the EU’s public spending limit up to a maximum of 1.5 percent of GDP for a period of four years.

The deadline for requesting loans is June 30, 2027, and countries may receive the cash until the end of 2030. They must repay loans to the Commission within 45 years.