Important Takeaways:

• The European Union will free up $840 billion in funding to funnel into defense across the bloc, European Commission chief Ursula von der Leyen announced on Tuesday.
• Dubbed “Rearm Europe,” the remarks from the European Commission’s president came hours after President Donald Trump suspended all U.S. military aid to Ukraine, widening the gulf between Washington and Kyiv and going against the fresh commitments of support from Europe for Ukraine in recent days.
• “I do not need to describe the grave nature of the threats that we face, or the devastating consequences that we will have to endure if those threats would come to pass,” von der Leyen told reporters.
• The European Commission head said she had written a letter to the leaders of the European governments to outline a “set of proposals” to “rearm Europe.”
• It details “how to use all the financial levers at our disposal in order to help member states to quickly and significantly increase expenditures in defense capabilities, urgently now, but also over [a] longer period of time, over this decade,” von der Leyen said.
• As part of the proposal, countries in the bloc will have access to loans of up to €150 billion, or just shy of $158 billion, for defense investment. The plan will also mean activating what is known as an “escape clause” for EU countries in a set of rules that currently govern how member states manage their public finances.
• …European nations are scrambling to work out how to plug huge gaps in its military capabilities that the U.S. has traditionally filled.
• Efforts to rearm will focus on air defense missiles, artillery ammunition and the systems to fire them, as well as drones and counter-drone warfare and other areas of the military, von der Leyen said.
• NATO states have less than 5 percent of the necessary air defense capabilities to protect central and Eastern Europe from large-scale attack, the Financial Times reported in May 2024.
• European officials have previously told Newsweek that air defense capacity is currently a fraction of what it should be, and a major worry.
• As Washington rewrites its relationship with the continent, there are deep and pressing concerns about whether the various leaders across the continent can come up with a coherent strategy to protect NATO’s continental countries, without U.S. involvement. European officials publicly and privately agree that defense spending must dramatically increase, but are split on how quickly this can happen, and by just how much.
• The new plan will mean member states can “massively step up their support to Ukraine,” von der Leyen remarked on Tuesday, which she translated to “immediate military equipment for Ukraine.”

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