EU leaders fear Commission power grab on defense after Trump’s exit

BRUSSELS — The European Union is preparing for a military spending bonanza. But for governments, it's not only about the cash.

An emergency meeting of EU leaders on Thursday to figure out how to boost Europe’s security, amid United States President Donald Trump’s looming military disengagement from the continent, should be a chance to project a show of unity. But instead, it looks like a power grab is on the cards.

National capitals fear European Commission President Ursula von der Leyen will exploit this crisis to extend Brussels' powers to new areas and strengthen her influence vis-à-vis national governments.

During the Covid-19 pandemic, she sidelined countries to purchase vaccines on their behalf, and at the start of the war in Ukraine, she took the lead on Russia sanctions and weapons deliveries for Kyiv. This centralizing approach earned her the moniker of “Queen Ursula.”

EU leaders don't want this to happen again on a sensitive issue like defense spending.

“Defense is still very much also a national responsibility,” said a senior EU diplomat last week explaining their country's opposition toward an defense cash pot handled by the Commission. Like others in this story, they were granted anonymity to speak about a sensitive topic.

Countries such as Poland and Finland in particular want to shield defense from the Commission’s attempted overreach. 

“Poland has a clear idea about wanting to do this outside of the Commission,” said a second EU diplomat from another country. 

They added, however, these lofty arguments are really a “fig leaf to hide more sensitive issues such as member states not wanting to have any outsider saying what you should do.”

Tensions will come to a head during the March 6 emergency meeting of EU leaders, where von der Leyen said she will present a "comprehensive plan to re-arm Europe."

A draft document prepared by EU governments for that meeting, seen by POLITICO, urges the Commission to give countries more fiscal room "without delay" and to propose "additional funding sources" for defense "at EU level," including making it possible to redirect funds for regional development. They call for the EU executive to "present swiftly relevant proposals."

According to that paper, the Commission will offer different "funding options" in a letter to EU leaders.

The Trump effect

This week von der Leyen will outline how she intends to loosen the EU’s spending rules to allow countries to effectively exempt military spending from Brussels’ tightly controlled budget deficit limits, several officials said, as the bloc reels from mounting fears that Trump will abandon Ukraine and Europe.

EU countries, however, are divided over the fine print of the "national escape clause" — an emergency mechanism designed to ease pressure on countries facing a sudden emergency.

Von der Leyen said that this mechanism will be applied “in a controlled and conditional way” to prevent rampant spending from highly indebted countries.

But fiscally conservative states such as Germany and the Netherlands, and military heavy hitters like Greece, want to limit the emergency clause to countries that already spend more than 2 percent of their gross domestic product on defense, as an incentive for others to hit that target.

The idea has angered states that are short of this target, including Italy and Spain.

“That’s absurd because it would prevent countries that most need to increase spending from doing that," said a third senior EU diplomat.

A separate proposal championed by Poland consists of granting more flexibility to national capitals by broadening the definition of defense spending in EU rules.

Crucially, this option would allow EU countries to decide independently which investments are to be exempted — limiting the Commission’s policing role and potentially allowing unrestricted spending. 

A fourth diplomat cautioned that the “Commission [will] hold more power to themselves” if this idea does not come to pass.

Defense fund 

Tinkering with the EU’s spending rules, however, will hardly unlock the scale of funding that is required to radically boost the bloc's defense needs. 

The bigger question facing governments in the future is how to create a joint money pot that will sustain long-term defense investments. 

Von der Leyen recently floated an EU tool to supply key weapons programs like missiles, drones and integrated air defenses.

She omitted, however, whether the instrument should be financed by EU common debt — an idea that also splits governments.

Highly indebted governments such as Italy and Spain support issuing common EU debt — which is effectively free money — for defense.

Another idea that was publicly floated by Economy Commissioner Valdis Dombrovskis involves repurposing €93 billion in unused loans from the EU’s post-Covid scheme to finance defense.  

But for some countries, like Poland, a separate fund or a development bank outside the EU framework would be a more appealing solution.

These options would allow countries such as the United Kingdom and Norway to join the bloc’s efforts, and may be more achievable than any EU-wide instrument, which would have to be unanimously approved by the EU’s 27 governments, including Hungary’s pro-Russia strongman leader Viktor Orbán. 

“How the fuck are you going to convince Hungary?” questioned a fifth EU diplomat. 

Jacopo Barigazzi contributed reporting.