The European Union approves a defense fund worth 150 billion euros to enhance collective security.
The European Union countries agreed on Wednesday, May 21, to urgently legislate the creation of a new defense financing fund worth 150 billion euros (170 billion dollars) in the form of loans.
This comes as part of efforts to enhance the military capabilities of the continent amid escalating concerns over Russian threats and potential reduction of U.S. security support under President Donald Trump's administration.
The decision followed a proposal put forward by the European Commission last March, aiming to fill the defense gap resulting from uncertainty about the continuation of U.S. protection for Europe.
Member states have witnessed an increase in defense spending by over 30% in the past three years due to the Russian-Ukrainian war and the possibility of threats extending to their territories. However, European leaders see this increase as "insufficient" to address current challenges.
Under the slogan "Buy European Products," the new initiative called "Security Work for Europe" aims to enhance defense cooperation among member states by funding joint projects, according to Reuters.
To qualify for funding, 65% of the project's value must come from companies based in EU countries, the European Economic Area, or Ukraine.
However, companies from partner countries of the Union in the security field are allowed to participate if they meet additional conditions. In this context, the United Kingdom signed an agreement with the European Union on Monday, opening the door for companies like BAE Systems to participate in funded projects.
The European Commission adopted an exceptional measure to expedite the approval of the legislation, bypassing the European Parliament and requiring approval only from the qualified majority of the 27 member countries.
Ambassadors approved the legislation after two months of negotiations, retaining most of the original proposal. Ministers are expected to vote on the legislation finally on May 27 for it to come into effect.
