Reuters reported that on March 4, the European Commission (EC) proposed a new general loan worth 150 billion euros ($157.76 billion) for EU governments to borrow to serve defense investment.
This is seen as one of the efforts to mobilize a total of 800 billion euros to strengthen Europe's defense capabilities in the context of political instability and pressure from US President Donald Trump.
According to the EC, this joint loan of 150 billion euros will be used to develop defense capabilities across Europe, including missile and defense systems, artillery, missiles and ammunition, drones and UAVs, as well as other needs from cybersecurity to military mobility.
EC Ursula von der Leyen said the loan would help member states combine demand and procurement together to reduce costs, limit dispersation, enhance competitiveness and strengthen the bloc's defense industry.
EU leaders will discuss the proposal at a special summit on defense spending on 6 March.
The EC also proposed allowing EU countries to use the European budget, which is provided to balance the living standards between regions, for defense purposes, and called for the removal of restrictions in the bloc's budgetary rules on government spending when investing in defense capabilities.
von der Leyen affirmed that Europe is ready to take responsibility, possibly mobilizing nearly 800 billion euros to strengthen security and stabilize the region. She emphasized that the EU will continue to cooperate closely with NATO, and at the same time considered this an important moment for Europe to act.
According to Reuters, the SXPARO index increased from 2,265.36 to 2,284.88 after the EU proposed an 800 billion euro defense funding package. This shows that investors have reacted positively to this plan.
SXPARO is the index code of Stoxx Europe Aerospace and Defense Index - a stock index that tracks the performance of European companies operating in the fields of aerospace and defense.
