Brussels, 21 March 2025
“Check against delivery”
Thank you all for coming to this discussion, and to our European colleagues here in Berlin for organising the discussion.
These are very special days. As you have said, we are matching the processes in Berlin, I would even say that we are competing over who will announce stronger statements on defence. I would like to congratulate both the current and future German governments on the decisions that serve as a powerful and inspiring example, one I hope will resonate with all other member states in Europe. We can just applaud, as such kind of actions we need now. We need to act fast, and we need to act big in order tobe ready for the wars of today and for the wars of tomorrow.
I will not try to speak too much about the White Paper. If anyone wants a clear political overview of what the European Union is trying to achieve, I recommend reading it. But in addition, I encourage you to read the recent speech by President Ursula von der Leyen, delivered two days ago at the Military Academy in Copenhagen. It provides an excellent summary of how the Commission and EU leadership view the situation from their windows, and outlines what we must do. I will quote her simple but powerful statement: “If Europe wants to avoid war, Europe must get ready for war.”
Since there are also military people in the room, I will not go into military details as acivilian. But as a former Prime Minister, when I see some numbers where we are and where Russia is, then I understand very much how big the threats are and how big of a job we need to do. I will highlight you two numbers.
First, NATO’s Secretary General recentlyannounced that Russia can currently produce more weapons in three months than all NATO member states—including the US, UK, and Canada—can produce in a year.
Second, if measured in purchasing power parity, Russia will spend more on its military this year than all EU member states combined will spend on defence.
My conclusion is very simple: if we allow such numbers and imbalance to remain for a longer period of time, we will continue to tempt Putin to test us, perhaps very soon. And again, we must take very seriously what intelligence services, like those in Germany and Denmark, have recently said: that there are real discussions in Kremlin about the possibility of testing Article 5 in the near future, at least until 2030. So those are the realities we are facing. Of course, there are also the so-called negotiations—whatever we want to call them— on a ceasefire in Ukraine. And there are some statements we hear from our partners on the other side of the Atlantic. I will notelaborate too much on that. But from the very beginning, even before the American elections, when I was nominated as a candidate to become Commissioner, I kept repeating that we have two challenges to keep in mind.
One is very urgent: It is really Russia and Ukraine. We now see even more evidence of the threats and the urgency.
The second is that we also see China’s military power growing very rapidly, and we must be aware that this will lead to an increased American pivot towards the Indo-Pacific, to mitigate Chinese power. We need to be ready for that.
Again, I repeat numbers which are not my invention. There are 450 million Europeans. We should not be crying out for 340 million Americans to defend us against 140 million Russians, who are not even able to defeat 38 million Ukrainians. So, we really need to take more responsibility onto our own shoulders, and to do that without delays, because the threats and urgency are already here.
I will just say a few words about the White Paper.
The White Paper outlines several clear priorities.
First, a surge in defence spending. Some steps on defence spending were already taken even before the White Paper was published. It is incredible how quickly the European Union can move when a real crisis hits.
As you know, two weeks after the European Council, the Commission this Wednesday approved not only the White Paper but also very important regulations on the SAFE loans – €150billion in attractive loans backed by the EU budget. It also includes the possibility for member states to use the so-called escape clause, allowing 1.5% of GDP spent on defence not to be counted toward deficit calculations. This opens up otherpossibilities.
I always stress that these are possibilitiesand opportunities for the member states to invest in defence, and to invest quite large amounts. We estimate that over the next four years, this could open up €800 billion in defence spending. That is additional money.
If we reach an ideal situation where, starting next year after the NATO Summit, member states begin spending 3.5% of GDP on defence, adding 1.5% to the existing 2%, that would mean around €600 billion spent annually, or €2.4 trillion over four years. If around 30% of that goes to defence equipment, that is €800 billion in real money going into defence industry, equipment, and so on. We can call this a “big bang”, or whatever else, in defence spending. The opportunity is here, but what member states choose to do, we will see. I hope we will be able to convince them to move forward.
Second, closing real capability gaps—not just thinking about the wars of today, but also the wars of tomorrow. Our gap analysis is based on NATO’s defence planning and capability reviews. We want a clear list of needs to create what we call an aggregated demand, visibility for industry and financial markets, and a clear understanding of the cost.
When talking about filling capability gaps, in my view, maybe too simplified, is that first, we need to ramp up the massive production of conventional items: artillery, ammunition, and so on. But that is only part of it.
The second part is developing strategic enablers: strategic airlift, air-to-air refuelling, space access, space intelligence, data, and more. Experts know even better what is needed. But these are areas where we are still heavily dependent on American services. We need to urgently address these gaps.
The third direction is implementing big defence projects of common European interest, like an air defence shield or Eastern and Northern border defence. And again, we must consider not only current wars, but also future threats, such as drones, electronic warfare, etc.
We also cannot forget to take care not only of weapons, but also of military mobility. That includes both infrastructure and legal issues, which we are also addressing.
The third priority is strengthening the European defence industrial base which I would call attempts to resolve structural problems in our defence industry and market. As has been clearly laid out in Draghi report, fragmentation and the fact that a lot of national defence spending goes outside of our own industry.
I always repeat it from my point of view:although I am a civilian, not military, when we think about defence resources, I see defence industry as a key strategic resource. In a real war, we will need industry not far away from the war zone to repair, maintain, and produce equipment. If we are now spending our money elsewhere, we need to understand that weare not really taking care of one of the very important defence resources.
This demands changes in how we conduct defence procurement. Joint procurement is, in my view, a crucial strategic tool that we need to learn how to use, and which we must incentivise.
Another important point in the White Paper is simplification and removing obstacles. In June, we plan to propose a “Simplification Omnibus” for defence.
I often give Ukraine as an example: in 2022, Ukraine’s defence industry produced €1 billion worth of weapons annually. But because of war, and real simplification, by the end of 2023 they could produce €35 billion, increasing the capacity by 35 times. That’s a real big bang. I do not think we need a 35-times increase, but it shows clearly what is possible.
And the last one, which perhaps should be the first chapter of the White Paper, is the support for Ukraine.
I will not elaborate again, but I will remind you that €50 billion has already been provided by the EU to support Ukraine’s defence capabilities. That’s about €16 billion per year, which is less than 0.1% of our GDP. We need to remember that wecan do more.
With ReArm Europe plan and new instruments, especially SAFE loans, AAAloans, 45-year maturity, and 10 years of grace period, we can find new possibilities, together with Ukraine and member states, to significantly increase support for Ukrainian defence.
We are also looking at possibilities to strengthen our institutional cooperation in defence: creating a task force to coordinate all aspects of our defence support for Ukraine, speeding up integration of Ukrainian defence industry with the European ones. We expect to soon agree at the Parliament and Council on the EDIP program, which includes a chapter on integration.
I am starting to understand now [for the first time] what we wrote in the White Paper. It is about the future of the European defence. We included all things related to Ukraine. We included Ukraineas a real partner in our defence. That is an important step forward in our political thinking.
The drafting process included input from more than 20 member states, industry,and experts. Thanks to everybody. Germany and its strong industry associations here were very active.
This period of 100 days of what I call,reflection, brought a visible convergence of our attitudes. That is why I was notsurprised that some steps were takeneven before the Paper was published, because we were already on the same page with key players.
For me, the approval of the White Paper marks the start of joint action. That is why I said even during the presentation: from now on, the most important thing is implementation, implementation, implementation, along with simplification and realisation of new opportunities.
I saw quite a lot of expectations about the White Paper. As I always repeat, we need to understand one very simple thing. We cannot expect Putin to be deterred by reading the White Paper to him aloud. What matters is implementation and production of needed weapons, strengthening of our capabilities, and strengthening Ukraine’s capabilities. That is what will make a difference.
I will not talk much about the financial part, about SAFE loans and the national escape clause. But next week, we will also approve a revision of cohesion policy, allowing member states to spend cohesion funds on defence-related projects. We need to understand that developing the defence industry creates jobs, supports regional economies, and so on. We are removing obstacles to using these funds for defence.
Today, the European Investment Bank is also taking a very important step. After our long discussions, they are narrowing the definitions in their mandate that restricted defence investment, opening up more possibilities and fields to become available.
Also on Wednesday, we approved an important communication on the Savings and Investment Union, which we hope will enable private funds to be directed into defence.
One thing I would like to clarify, there were some incorrect media reports about the SAFE loans’ regulation. Some said that we excluded the UK and Canada. That is not true.
First of all, we are creating new possibilities to invest in our defence. The €600 billion will come from national defence spending, which remains totallyunregulated. Member states are free to spend it wherever they choose, including in Canada, the US, or the UK. Of course, it would be better to invest it in Europe, but that will depend on how effectively we can incentivise them.
Second, EU loans can be used to procure from companies that belong to the EU member states and that are established in Europe, including subsidiaries of third-country companies.
Third, and this is new: if friendly countries sign Security and Defence Partnershipswith the EU, the loans can be used to procure weapons directly from those countries as well. That includes the UK and Canada. So we are not excluding them, but we are simply expanding opportunities with countries with whom we are in very strong solidarity.
I hope we will soon have such partnershipagreements, with Canada and Great Britain, signed and starting to be implemented.
That is all I wanted to say about the White Paper. Maybe it was too long, but for politicians, it is always hard to stop.
Thank you very much.
Source – EU Commission