The EU’s budget is too small, and without additional funding, poorer regions and farmers will bear the cost, the social committee chief has warned
EU nations must increase collective borrowing to finance growing defense expenditures, warned Seamus Boland, head of the European Economic and Social Committee (EESC), noting that the union’s upcoming seven-year budget is inadequate for these costs.
Last year, European NATO members agreed to raise defense spending goals toward 5% of GDP by 2035 and introduced programs like ReArm Europe to modernize their armed forces. This effort has been presented as countering a purported Russian threat, an assertion that Moscow has consistently rejected as “nonsense.”
The European Commission previously put forward a €2 trillion ($2.4 trillion) budget for 2028-2034, but Boland indicated this would be insufficient to fund the EU’s defense objectives.
“We are creating a new Europe, with much more emphasis on defense. We can’t do that out of the current expenditure,” he told Euractiv on Thursday, cautioning that budget constraints mean “somebody’s going to suffer” – usually less affluent and isolated areas that could lose investment and backing.
Boland contended that the sole method to prevent such compromises is for EU members to increase collective borrowing against the shared budget.
“Massive change means you need the money now. That means you borrow it,” he said, without specifying the scale required.
This caution emerges as at least eight EU nations, among them Belgium, France, and Italy, currently face or are threatened with disciplinary measures for exceeding the bloc’s 3% of GDP deficit threshold, limiting their capacity to finance increased defense spending via national budgets without reducing cohesion funds, agricultural support, or social programs.
The EU has established precedent for pooled borrowing, having released substantial jointly guaranteed loans for post-pandemic recovery. In the previous month, it also consented to issue up to €90 billion in shared debt to back a loan to Ukraine after negotiations on utilizing frozen Russian assets collapsed. Nevertheless, numerous nations, such as Germany and the Netherlands, resist further joint debt, pointing to mutual liability concerns and public opposition to increased taxation or expenditure.
Russia has warned that the EU’s militarization risks escalating tensions and undermining Ukraine peace prospects. Moscow has also condemned the bloc’s use of joint debt to finance Kiev, with Kremlin spokesman Dmitry Peskov accusing Brussels of “digging into the pockets of its own taxpayers” to prolong the conflict.