Budgeting for Security?
In response to Russia’s war of aggression against Ukraine and the prospect of a diminishing U.S. role in the European security architecture, the European Commission has put forward the ReArm Europe/Readiness 2030 package, which combines temporary exemptions from EU fiscal rules with the creation of a 150 billion Euro loan instrument (SAFE) to bolster defence spending.
This discussion paper argues that the proposal has limited fiscal impact and is unable to address the persistent lack of coordination among Member States, as it does not adequately incentivise joint procurement. Instead, the authors suggest to future-proof the EU's fiscal rules and develop an EU grants-mechanism tied to strategic cooperation, greater parliamentary oversight, and a broader concept of security that includes climate and democratic resilience.
Product details
Table of contents
- Introduction
- Outline of the European Commission's proposal for defence investment
- Assessment of the ReArm Europe/Readiness 2030 package
3.1 Fiscal rules and national escape clause
3.2 SAFE instrument
3.3 Increased budget flexibility and repurposing cohesion funding
3.4 European Investment Bank - Considerations on competition and profit
- Policy recommendations
The authors