European Commission President Ursula von der Leyen has barely announced the latest masterplan to turn the EU into a geopolitical heavyweight. Too good to be true, as they say.
“We must invest in our security like we invested in our recovery,” von der Leyen declared, apparently forgetting that Europe’s COVID-era unity lasted exactly as long as the hand sanitizer stocks.
The proposal was simple enough: recreate the magic of the pandemic recovery fund, but swap vaccines for missiles.
Pool €150 billion in joint debt, relax the union’s fiscal rules just enough and arm Ukraine properly, and maybe — just maybe — give Europe’s defense industry the kick in the pants it’s needed ever since the Cold War.
In a plot twist as predictable as a Belgian rain shower, the grand vision of continental defence autonomy has already started to transform into a typical European mud-wrestling show.
Von der Leyen’s hopes for “strategic autonomy” (understand: not begging Washington for help) via shared loans for defence lasted roughly as long as a Eurovision song contest punchline.
This time, the killer blow came not from habitual spoiler Hungary (it has opted out much earlier from the plan), but from the very countries that usually demand more EU solidarity: France, Italy and Spain.
Though, before the latest round of negotiations, Kaja Kallas declared that the plan had strong backing, it was not quite the case. Spain and Italy have already said that it was too early to take a definitive position on the proposal.
The trio’s sudden allergy to shared debt has left von der Leyen’s plan bleeding out before it even made it to the Council’s agenda.
Though, maybe not quite surprisingly: the three has been battling with high debt and overstretched budgets.
France, currently enjoying a debt-to-GDP ratio of 110 percent, was first to balk.
“Strategic autonomy is crucial,” said an Elysée official, but with limits. Understand: except when it means Germany gets a say in our defense contracts.
Paris would apparently prefer to fund its defense industry the old-fashioned way: with opaque national subsidies that may or may not violate EU state aid rules. And via defense bonds: grants financed by joint EU borrowing on the capital markets. (FYI, this is something against the so-called frugal four would fight until death.)
Italy, carrying a debt pile that makes Greece look frugal, reacted as if von der Leyen had proposed paying for the scheme with Meloni’s personal credit card, no matter that the country’s flagship Leonardo could be one of big winners.
And finally, Spain, ever the creative accountant, countered with a classic EU fudge, “let’s call it an EU fund, give it us and let’s make it disappear without trace”. In their views, bending the fiscal rules to allow more spending leeway wasn’t enough to meet Europe’s defense challenges.
The irony lies in the repetitive nature of the debate.
This current collapse follows the exact same script as many failed attempts before.
Step One.
Identify an existential crisis, let it be either Russian aggression or the U.S. abandoning the continent.
Step Two.
Propose collective solutions, usually centered around “More Europe” or “ever closer union”.
Step Three.
Realize that national interests are too divergent to unify the member states in topics more sensitive than the size and shape of cucumbers.
Even the EU’s own economy chief, Valdis Dombrovskis, couldn’t resist kicking the plan while it was down, warning against “defense washing” — the practice of using security threats to justify blowing up deficit rules.
Because nothing says “credible deterrence” like rigid adherence to arbitrary fiscal targets.
Now, as the big idea looks dead, Brussels is left with the usual scraps, like diverting €3 billion in annual profits from frozen Russian assets (that would be roughly enough to fund Ukraine for a few minutes of war).
Another possibility will be tweaking the European Investment Bank’s rules to fund “defense startups” (read: Rheinmetall’s side hustle).
And to hope, that Warsaw was too busy with its own rearmament to notice that the rest of Europe wasn’t following suit.
The lesson, as always: Europe’s leaders are all for federalism — until someone asks them to pay for it.
