The finance minister of Poland has declared that the European Commission’s ReArm Europe defense initiative is now a major focus for the country’s presidency of the Council of the European Union.
Andrzej Domański stated that the objective of the Polish presidency is to “urgently finalize the work on the package.”
During a second day of discussions in Warsaw, EU finance ministers addressed how member states can implement the commission’s defense spending proposals.
This meeting follows significant summits held in Brussels last month, where all 27 member states endorsed the ReArm Europe initiative.
European Commissioner for Economy Valdis Dombrovskis mentioned that the commission has urged member states to activate their national escape clause within the Stability and Growth Pact by the end of April.
This activation would relieve member states from adhering to the bloc’s standard deficit rules, allowing them to increase defense spending.
“A considerable majority of member states are contemplating triggering this clause,” said Mr. Dombrovskis, who noted that it is expected member states could begin utilizing the funding procedure by July.
A central aspect of ReArm Europe is a private loan mechanism, permitting member states to borrow a total of up to €150bn from capital markets, a sum that would be supported by the EU’s budget.
The loans are aimed at funding defense investment projects in sectors such as ammunition and missile production, drone technology, and cybersecurity.
Ministers also reviewed a report on defense spending from the independent think tank Bruegel, which is believed to suggest the creation of a central EU fund termed the European Defence Mechanism.
The report indicates that member states would pay fees to access defense equipment financed by the fund instead of repaying debt through their national budgets. This approach may appeal to countries with already high public debt levels.
Mr. Domański mentioned that the paper provided “food for thought” for ongoing discussions.
Earlier, Minister for Finance Paschal Donohoe informed RTÉ News that Ireland could finance its current defense budget from domestic taxation, suggesting that Ireland would not participate in borrowing through the private funding mechanism for defense purposes.
“Fortunately, we are in a position to meet our defense needs from the tax revenue we collect in Ireland,” stated Mr. Donohoe.
Nevertheless, he noted that Ireland supports the commission’s proposed measures to assist other member states in bolstering their security budgets.
