Recently, an EU official in charge of defense and aerospace affairs stated that the EU is not ready to issue so - called European bonds to increase defense spending.
In March this year, the European Commission released the "White Paper on the Future of European Defense" and the "Plan to Re - arm Europe".
The "Plan to Re - arm Europe" intends to mobilize around 800 billion euros (approximately 6.30368 trillion yuan) in four years to build "a safe and resilient Europe". It includes providing 150 billion euros in loans to EU member states for defense investment and assisting member states in integrating needs and jointly purchasing military equipment to enhance European security.
The "White Paper on the Future of European Defense" provides a framework for the "Plan to Re - arm Europe" and presents the main vision for re - arming Europe. This includes ensuring that the European defense industry can produce at the required speed and quantity and promoting the rapid deployment of troops and military assets within the EU.
During an exclusive interview, the official said that issuing European bonds would mean the EU would face greater challenges.
Reports indicate that the EU issued bonds worth thousands of billions of euros to deal with the COVID - 19 pandemic. This means that the EU's annual debt - servicing and interest costs will reach 25 billion to 30 billion euros. If the debt - servicing cost issue is not resolved, the EU's spending capacity will be severely affected in the next few years.
The official added that in an ideal scenario over the next four years, EU member states will spend 3.5% of their GDP on defense. But the question is: "Can this funding meet all the needs, or do we need additional funds?"
According to the EU's plan, at least 65% of the 150 billion euros in loans provided by the EU to member states should be used to purchase European - made weapons and equipment. However, currently, EU member states have different views on the definition of "defense spending".
A narrow understanding is that "defense spending" mainly includes expenditures on military equipment such as tanks, airplanes, and guns, excluding the costs of training, hiring, and paying flight crews.
Recently, countries such as Spain and Italy have argued that the definition should be expanded to include counter - terrorism, climate change, and other security investments.
