MNI INTERVIEW: EU Summit To Decide On Defence Boost Options
MNI (BRUSSELS) - All funding options are on the table at the European Union’s March 6 summit where leaders will decide how best to give a big and fast boost to the bloc's defence spending, former secretary general of both the European Parliament and the centre-right European People's Party Klaus Welle, told MNI.
First order of business will be strengthening Ukraine's negotiating hand in upcoming peace talks with Russia, giving the country a "credible pipeline of money and arms" in the absence of deliveries from the U.S., said Welle, who now runs the Martens think tank in Brussels.
Leaders will then have the job of deciding which of the many EU defence funding options currently on the table should be made short-term priorities and which are for the longer term.
First among these options will be national budgets and the much-mooted option of granting member states National Escape Clauses to the EU’s fiscal rules. (See MNI: EU Eyes National Escape Clauses To Boost Defence Spending)
"The Commission can help by conceding that additional funding - interpreted as meaning the amount going beyond NATO's 2% target and towards 3% or even 3.5% of GDP - should not be considered part of the deficit criterion under the fiscal rules,” Welle said.
REGIONAL FUNDS
Germany might not need this flexibility in order to boost its own defence spending. Welle reckons the country’s likely new coalition government between centre-right and centre-left will shortly come forward with a new special defence fund proposal, amounting to EUR200 billion, according to reports.
At the EU level, massive amounts can also be redirected from regional fund "leftovers", amounting to EUR93 billion, Welle said. In recent years, states have turned to the EUR800 billion NextGenerationEU programme to finance projects which would normally have been funded from the EU’s regional budget, leaving large amounts of these funds unspent. (See MNI: EU Paper Flags Savings From Rolling Over NGEU Debt)
These could include funds for dual-use “mobility” infrastructure projects, such as roads and harbours, while under-tapped EU regional funds which have been earmarked for research could also provide significant quantities of money for defence.
Commission officials are currently focusing on the National Escape Clause option as the most promising way to significantly and quickly boost defence spending, but should the problem associated with exceeding fiscal limits prove too intractable, Welle said there is a still a possibility that the EU might still decide on an NextGenerationEU II programme for defence.
"On March 6 we will see more clearly which options are pursued now, not excluding others which will be pursued later," Welle said.