ReArm Europe and the German vote: in three weeks the money for defence changed hands

On Tuesday 4 March Ursula von der Leyen presented a plan she called ReArm Europe. It has five parts. The Commission will propose to activate the national escape clause of the Stability and Growth Pact so that Member States can raise defence spending without entering an excessive deficit procedure; the Commission says that an average increase of 1.5 per cent of GDP would free close to 650 billion euros over four years. A new instrument would lend 150 billion euros to Member States for joint purchases in areas such as air and missile defence, drones and ammunition. Cohesion funds could be redirected to defence, the European Investment Bank would widen its lending and private capital would be drawn in. The Commission puts the total at close to 800 billion euros and says that Europe has entered an "era of rearmament"[1].

Two days later the European Council met in special session. Its conclusions on European defence say in paragraph 1 that "Europe must become more sovereign, more responsible for its own defence". Paragraph 3 welcomes the Commission's intention to recommend activating the national escape clause in a coordinated manner, notes the plan for loans backed by the Union budget of up to 150 billion euros, calls on the Commission to propose additional funding sources for defence, and lists the first priority capability areas, beginning with air and missile defence and artillery systems. Paragraph 7 says the European Council will return to the matter at its March and June meetings[2]. On Ukraine the leaders could not agree. Twenty-six Member States adopted a separate text that supports Ukraine's territorial integrity, pledges 30.6 billion euros for 2025 and says the Union is ready to contribute to security guarantees. Hungary did not join it[3].

On 19 March the Commission published a White Paper for European Defence under the name Readiness 2030 and a proposal for a regulation called SAFE, Security Action for Europe, which carries the 150 billion euros of loans and opens joint procurement to Ukraine and to EFTA and EEA countries. Von der Leyen said that "the era of the peace dividend is long gone"[4].

What the Bundestag changed on 18 March

The decisive vote took place in Berlin. On 18 March the Bundestag adopted an amendment to the Basic Law by 513 votes of 733, with no abstentions, above the two-thirds majority of 489 that a constitutional amendment requires[5]. The amendment does three things. Defence spending above 1 per cent of GDP no longer counts against the debt brake written into the Basic Law in 2009. A special fund of up to 500 billion euros, outside the ordinary budget, may be borrowed for infrastructure over twelve years; 100 billion euros of it go to the Climate and Transformation Fund, and the text ties the fund to climate neutrality by 2045. The Länder gain borrowing room of about 15 billion euros[6].

The CDU/CSU and the SPD, who are negotiating a coalition, wrote the package. The Greens voted for it after Friedrich Merz guaranteed the 100 billion euros for climate measures. The AfD and the FDP opposed it, and the FDP tried a last-minute change to derail it. The package passed in the outgoing Bundestag, because the new one, which convenes on 25 March, has enough AfD and Linke members to block it[6]. Merz, who campaigned in February against loosening the debt brake, said that Germany's friends in the Union were looking to Berlin as much as its adversaries[6]. The Bundesrat is due to vote today, 21 March, and it also needs a two-thirds majority[5].

We note the sequence. The Commission proposed the escape clause on 4 March. The European Council endorsed it on 6 March. Germany, the one Member State whose constitution forbade the borrowing the Commission invited, changed its constitution twelve days later. The Union and its largest Member State have moved faster in three weeks than in the three years since the invasion of Ukraine.

What the money does not yet buy

We are the generation that will service this debt. We therefore ask a question that the texts do not answer: what capability will exist in 2030 that does not exist today?

The European Council's list of priorities is a list of categories[2]. The Commission's plan is a list of financing channels[1]. Neither names a programme, a quantity or a delivery date. The escape clause lets each Member State spend more on its own national priorities, and nothing in paragraph 3 of the conclusions obliges two Member States to buy the same thing. The 150 billion euro instrument is the only part of the plan that requires joint procurement, and it is less than one fifth of the headline figure[1][4]. If the remaining 650 billion euros go through twenty-seven national procurement systems, Europe will have more money and the same fragmentation.

The German amendment raises the same question in national form. Spending above 1 per cent of GDP is now exempt from the debt brake, but the exemption applies to defence spending as such, and it does not say what Germany will buy or from whom[5]. A constitutional exemption for defence is an open credit line.

What we ask

We ask the Council, when it adopts the SAFE regulation, to keep the condition that loans finance joint procurement, and to resist any amendment that lets a Member State borrow under it for a purely national purchase. Joint procurement is the only part of ReArm Europe that changes how Europe buys[4].

We ask the Commission, in its recommendation on the national escape clause, to require each Member State that uses it to report annually which of the capability priorities in paragraph 3(f) of the European Council conclusions its additional spending serves[2].

We ask the next German government to attach its first budget under the amended Basic Law to a published procurement plan with quantities and dates, so that the exemption above 1 per cent of GDP finances identifiable equipment[5].

We ask the European Council in June to adopt a single Union target for the capability gaps it listed on 6 March, with a date, so that our generation can measure in 2030 whether the money bought readiness or only receipts[2].