An EU diplomat from a small eastern country told POLITICO that even if countries at the border with Russia upped their defense spending by 20 percent, it wouldn’t be enough to secure Europe due to the smaller size of their respective economies. “We need everyone [to increase defense spending],” said the diplomat, who was granted anonymity to speak freely.
Dombrovskis agreed that countries bordering Russia and Belarus were facing major risks and likely needed further support. He said he backed the exploration of a new intergovernmental fund, originally floated by the Bruegel think tank last week, that would allow both EU and non-EU countries to pool money for rearming the continent.
The proposal has also raised the possibility of the Commission participating as a direct shareholder in the fund.
Dombrovskis said the fund could help to engage countries outside the EU and bypass the need for unanimous agreement by potentially skirting some of the EU’s stricter budget rules.
The pitch is gaining traction in frontline states like Poland and the Baltics, which have significantly ramped up defense spending since Russia’s invasion of Ukraine.
But other major players like Germany are not keen to back the project and countries like Spain — eager to avoid adding debt — are advocating for new jointly issued EU bonds, similar to those used during the Covid-19 crisis.
