Key Takeaways
- The European Union redirects 335 billion euros from COVID relief to defence projects.
- The Russia-Ukraine war has impacted the European economy and necessitated greater defence spending.
- The European Defence Industry Programme allows countries to use recovery money for defence projects.
Brussels: The European Union will redirect 335 billion euros from the Resilience and Recovery Facility (RRF), which was established for COVID relief, to defence projects, after receiving permission from the European Commission.
According to Politico, the Commission, while declaring the amount to be eligible for defence expenditure, said that countries have until August 2026 to meet the certain agreed targets in order to receive the funds.
On Wednesday, the body told countries that defence projects under common EU plans such as the satellite communication programmes were now eligible.
The European Commission has called for lawmakers and governments to include in the European Defence Industry Programme (EDIP) regulations – a provision to make it possible for countries to use the recovery money – to make contributions to the defence fund.
“These alternatives could help the Recovery Facility to deliver additional important benefits from common European priorities, including in the areas of security and defense,” Economy Commissioner Valdis Dombrovskis told reporters, listing a large number of ways in which countries can redesign their plans.
The Russia-Ukraine war has greatly impacted the European economy, leading to increased defence spending to ensure security and advance the weapons and arms industry. This shift in priorities is a significant change for Europe since the pandemic.
The idea behind the initiative is, that if a country diverts RRF-backed money to make contributions to the EU’s target plans, then it can easily secure the required funds.
When asked how defense investments can contribute to the RRF’s green and digital goals, Dombrovskis said the current rules provide no specific treatment for defence-related measures.
However, there is no clear consensus on the issue, as several countries which include Spain and Italy – the top beneficiaries of the funds – have asked for the postponement of the 2026 deadline.
Additionally, the EU executive has also rejected the idea, meaning that a deal has to be reached between countries and then ratified by 20 parliaments, a process that would not only add considerable time to the initiative, but could outright stall it for a very long and uncertain time.
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