ReArm Europe One Year Later - Between Expectations and Reality

In February 2025, U.S. Vice President JD Vance used the Munich Security Conference to announce that American military aid to Europe would be scaled back, calling on Europe to step up for its own defense. The declaration triggered immediate consternation across the Old Continent. Fortunately, the shock was short-lived and served as a mobilizing force for European leaders. Soon after, the European Union announced its groundbreaking “ReArm Europe” plan (later renamed “Readiness 2030”), which aimed to increase defense investment in Europe, boost the defense capabilities of EU member states, and strengthen the competitiveness of the European defense industry.

However, it is worth noting that the idea itself was not new; EU defense spending has been rising steadily for nearly 10 years, and since 2020 only, it has increased by 62.8%. Immediately following Russia’s attack on Ukraine in 2022, on March 10–11 in Versailles, European leaders agreed on a plan to increase defense spending and the defense capabilities of EU member states. Following preparatory measures between March and July 2023, the European Defense Industry Reinforcement through Common Procurement Act (EDIRPA) was adopted on October 9 to encourage member states to cooperate on public procurement and joint arms procurement. In June 2023, the Act in Support of Ammunition Production (ASAP) was adopted to address the shortage of ammunition, missiles, and components for their production due to ongoing support for Ukraine (agreed upon with the European Parliament in July). Nevertheless, it was the 2025 Munich Conference that truly accelerated the EU’s efforts to strengthen its defense capabilities, leading to the presentation of the “ReArm Europe Plan / Readiness 2030” on March 19, 2025.

Sudden and Strong Need to Defend

ReArm Europe, later renamed Readiness 2030 (and operating under both names), is a groundbreaking investment plan for the European Union’s defense—the largest in the organization's history. As a direct response to the U.S. pivot, the ongoing war in Ukraine, and Russia’s continued imperialist ambitions, the plan calls for an investment of as much as €800 billion (until 2030) in the European defense industry, built on five main pillars: loosening EU spending rules by member states, the allocation of €150 billion in loans for defense purposes, the possible reallocation of Cohesion Policy funds, the mobilization of private capital, and the use of European Investment Bank resources. The primary goal of these investments is to enable rapid and efficient production in the defense industry, facilitate the quick deployment of military units and resources throughout the EU, and strengthen Europe’s competitiveness while reducing its dependence on external suppliers and increasingly unstable supply chains. Simplifying regulations and reducing administrative burdens will help achieve these ambitious goals by enabling production at the required pace and scale, creating a true EU-wide defense market, and accelerating the defense sector's transformation through cutting-edge innovation, enhanced production cooperation among Member States, and joint defense procurement.

As the name of the plan suggests, it is essential to ensure as quickly as possible Europe's readiness to have at its disposal the full range of capabilities necessary to deter aggression and defend its territory in all areas. Therefore, the member states have identified the following priority capability areas: 1) Air and missile defense; 2) Strategic enablers (including strategic airlift, air-to-air refueling, maritime awareness, combat capabilities, and border security); 3) Military mobility; 4) Artillery systems; 5) Cyber, AI, Quantum, electronic warfare; 6) Missile and ammunition; 7) Drones and counter-drone systems; 8) Ground combat; 9) Maritime (enhanced naval capabilities to ensure maritime security). One of the key areas where rapid improvement is crucial is undoubtedly military mobility. To achieve this, the EU intends to simplify regulations, prioritize the armed forces’ access to transportation networks, increase the availability of dual-use transportation assets through joint procurement and industry cooperation, modernize key existing dual-use infrastructure, and invest in four key transportation corridors. Equally important in the EU’s approach are strategic stockpiles and readiness pools, which the EU plans to improve by supporting cross-border industrial partnerships, joint procurement, and domestic production in Europe.

And it is precisely European defense production that lies at the heart of the project. Currently, the EU defense industry lacks sufficient large-scale production capacity, is overly fragmented, and fails to tap into the potential of the single market. For this reason, the European Commission has identified strategic priorities aimed at supporting the European defense industry: stimulating demand to increase production capacity; reducing dependencies and ensuring security of supply; creating a genuine EU-wide defense market by simplifying and harmonizing regulations; transforming the defense sector through cutting-edge innovation; and developing skills and talent to foster innovation.

To achieve such ambitious goals, especially within such a short timeframe, it is essential to mobilize substantial investment capital. It is precisely for this purpose that the EU is allocating the €800 billion mentioned earlier. But how can such vast funds for military spending be secured? The mobilization of these resources is to take place on three main fronts. The first and largest of these is the activation of the Stability and Growth Pact's national escape clause. It is an instrument that allows member states (in exceptional circumstances beyond their control) to temporarily increase public spending or run higher deficits without being considered in breach of the EU’s fiscal rules. This would allow for support for member states’ public funding of defense through an additional expenditure of up to 1.5% of GDP, covering both investments and current spending, for at least four years. It is estimated that this would raise a total of up to €650 billion (for all EU member states). Second, it involves launching a special instrument called SAFE (Security Action for Europe), which, under Article 122 of the TFEU, allows for extraordinary measures to be taken in extraordinary circumstances. This will provide the EU with up to €150 billion in funding and enable it to offer Member States attractive loans that will accelerate investments in European defense capabilities. The guiding principles of this instrument are: “Buy more, Buy better, Buy together, Buy European.” What is extremely important is that the products procured must contain at least 65% of components originating from the countries making the purchase. Finally, as a third area, the plan also provides for mobilizing private capital by accelerating the creation of the Savings and Investment Union and by using European Investment Bank funds.

 The plan also aims to support Ukraine in its fight for freedom, as the European Union considers a secure Ukraine a priority for its own security—a point underscored by the slogan “Rebuilding European defense begins in Ukraine.” Therefore, increasing defense production capacity will enable greater supplies of ammunition, air defense systems, and drones for Ukraine, as well as broader access to communications and space services. Part of the ReArm Europe / Readiness 2030 is the proposal to integrate Ukraine into EU defense initiatives: including the potential incorporation of Ukraine’s defense priorities and operational needs into the EU strategy, the possible extension of the agreement between the European Defense Agency and Ukraine, and encouraging Ukraine to participate in, among others, Permanent Structured Cooperation (PESCO). PESCO, in particular, which allows countries to jointly plan, develop, and finance common projects to enhance defense capabilities and operational readiness, appears to be an important initiative. The process of bringing Ukraine closer to the EU is expected to continue in accordance with the joint security commitments between the European Union and Ukraine signed on June 27, 2024. In this context, PESCO should contribute to the EU’s broader efforts to meet Ukraine’s military needs. It also assumes the integration of the Ukrainian defense industry into the European technological and industrial base, including through the implementation of the Ukraine Support Instrument under the EDIP and the scale-up of the EU Defense Innovation Office.

In summary, the ReArm Europe plan aims to strengthen Europe’s defense capabilities by implementing the following priorities:

•   European Defense Flagships (Eastern Flank Watch; European Drone Defense initiative, European Air Shield; European Space Shield)

•   Closing Capability Gaps

•   Strengthening the EU Defense Industrial Base

•   Boosting Defense Investment

•   Standing firmly with Ukraine

The path to achieving them is expected to involve simplifying current legislation, establishing a strong and innovative European Defense Industry, spending together and European, achieving deterrence through disruptive innovation, while preparing for the worst-case scenario.

What We Were Able to Accomplish in the First Year?

The first year of the plan’s implementation should be evaluated positively—most notably, there has been a significant increase in defense spending across most EU member states, and the measures introduced by ReArm Europe / Readiness 2030 are already taking effect and delivering concrete benefits.

The increase in defense spending by member states has been steady and growing; this is clear in the figures for recent years, especially since Russia’s aggression against Ukraine. In 2021, EU countries spent a total of €251 billion on defense, while in 2025, military spending reached €418 billion (up from the projected €318 billion), according to a recent report by the European Defense Agency, an increase of 66.5%. Additionally, over the five years from 2020 to 2025, the increase stands at 78.6%. It is projected that in 2026, EU member states will allocate €454 billion to security, corresponding to 2.4% of the EU’s GDP. Defense spending is also set to be a key element of the EU’s financial framework for 2028–2034. Compared to the current 2021–2027 perspective, which allocated nearly €29 billion (€15 billion for defense alone, excluding space), we are talking about a projected increase of as much as approximately 400%—to an estimated €131 billion (according to the European Commission’s latest proposal) for security, defense, and space.

How did the implementation of the ReArm Europe / Readiness 2030 objectives proceed, step by step? On May 27, 2025, the Council adopted regulations establishing Security Action for Europe (SAFE), the first pillar of the plan, and made available €150 million in loans for defense investments. On July 8, the Council activated the national escape clause for the first 15 member states: Belgium, Bulgaria, Croatia, Czechia, Denmark, Estonia, Finland, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Slovakia and Slovenia, intending to help them facilitate their transition to higher defense spending at national levels while ensuring debt sustainability. These were later joined by Germany (October 2025), Austria (February 2026) and Spain (June 2026). Meanwhile, on September 18, the EU began negotiations with the UK and Canada on their accession to the SAFE instrument. On December 8, 2025, the European Defense Industry Program (EDIP) was introduced, providing the EU with €1.5 billion in grants for the 2025-2027 period. The program also supports Ukraine through a special instrument worth €300 million. Ten days later, the Council adopted new measures to support faster, more flexible, and better-coordinated defense-related investments across the five key EU programs: the Digital Europe Program, the European Defense Fund, the Connecting Europe Facility, the Strategic Technologies for Europe Platform, and Horizon Europe. Another extremely important element in the implementation of this ambitious plan was the publication in October 2025 of the Defense Readiness Roadmap 2030, which set specific timelines, guidelines, and targets for the next steps.

January 2026 marked a key milestone in the implementation of the plan—the first eight countries received the green light to access the SAFE instrument: Belgium, Bulgaria, Cyprus, Denmark, Spain, Croatia, Portugal, and Romania. The next countries eligible to access the program were Estonia, Greece, Italy, Latvia, Lithuania, Poland, Slovakia, and Finland. In April, Czechia and France were the next countries to receive the green light to access SAFE. The SAFE budget amounts to €150 billion. The European Commission raises these funds on the financial markets. Program participants are granted loans with a 10-year grace period and a 45-year repayment term. On May 8, 2026, Poland became the first EU country to sign the SAFE program agreement (followed shortly by Lithuania, Croatia, Romania, and Belgium), effectively finalizing the loan contract under the spending plan approved at the time of its accession to the program.

The EU Council Regulation on the launch of SAFE entered into force on May 29, 2025. The deadline for submitting national investment plans was November 30, 2025. In these documents, program participants listed the purchases for which they intended to secure debt financing. Once the Council and the Commission approved Poland’s plan, Warsaw was granted access to €43.7 billion in financing. This amount represents nearly one-third of the entire SAFE budget and is also the largest loan granted under the entire program. Eighteen EU member states have applied to access financing under the SAFE program. Denmark received the smallest allocation, having submitted a request for approximately €460 million. The following countries applied for loans of up to €5 billion: Greece (780 million), Finland (1 billion), Spain (1 billion), Cyprus (1.18 billion), Croatia (1.7 billion), Czechia (2.06 billion), Slovakia (2.31 billion), Estonia (2.34 billion), Bulgaria (3.26 billion), and Latvia (3.49 billion). Applications for more than €5 billion were submitted by: Portugal (5.84 billion), Lithuania (6.37 billion), and Belgium (8.34 billion). The only countries other than Poland that will receive loans exceeding €10 billion are: Italy (14.9 billion), France (15.1 billion), and Romania (16.7 billion). On May 29, Poland became the first country to receive the first tranche of €6.5 billion. The next countries were: Cyprus, which received €177 million on June 18; Lithuania, €956 million; and Croatia, €255 million.

In June, further significant steps were taken: representatives of the member states approved the Council’s mandate to negotiate with the European Parliament on a proposal to establish a new €115 million program for agile and rapid innovation in defense (AGILE). The goal of the AGILE program is to provide rapid, agile, and targeted financial support to small and medium-sized enterprises (SMEs), including startups and scale-ups. The new program is expected to launch in early 2027. Additionally, the EU has officially confirmed Canada’s participation (as the first non-EU country) in the SAFE instrument, paving the way for Canadian companies and products to enter the EU market through SAFE procurement. The United Kingdom remains in the negotiation phase (France is attempting to block its accession).

June also saw the first concrete steps to implement the promised simplifications in procurement under ReArm Europe / Readiness 2030. On June 10, the Council and the European Parliament reached an agreement on reducing bureaucracy in the European defense industry. This provisional agreement eliminates administrative delays in public procurement for security and defense, facilitates the flow of defense-related products within the EU, and strengthens intra-EU cooperation, providing Member States and industry with a clearer path to strengthen Europe’s defense capabilities. The new regulations stipulate that defense authorities have 102 business days to approve a permit to establish a new facility. If this deadline is not met, the permit is issued automatically. Two new transfer authorizations will reduce red tape for companies shipping military equipment abroad. It will also be easier for smaller companies to obtain research funding from the European Defense Fund. The cross-border transfer of defense equipment within the EU has long been considered a weakness. Companies exporting military goods to partners in other member states have often struggled with overlapping national regulations and lengthy approval procedures. The agreement introduces two new types of automatic transfer licenses: one for certified suppliers and recipients, and the other for industrial partnerships within the EU.

The most recent significant development is the Council's June 17 decision to begin negotiations with the European Parliament to establish a framework to increase military mobility—another key element of the Readiness 2030 plan. The goal of the proposed regulation is to improve Europe’s overall defense readiness by, among other things: removing regulatory barriers, including through harmonized authorization procedures and digitization; creating a new European Enhanced Military Mobility Response System (EMMERS) to facilitate large-scale and expedited military transport; supporting the modernization of dual-use transport infrastructure; and strengthening the protection of critical infrastructure essential for military transport. The new regulation is expected to be adopted by the end of 2026.

2026 is undoubtedly a significant milestone in strengthening European security; EU member states are spending more on defense, and the funds available through SAFE loans are extremely helpful in this regard—the first countries have already received a part of the funds. They are beginning to sign contracts with companies. Another groundbreaking development is the effort to streamline the EU’s now-legendary bureaucracy and accelerate the implementation of mechanisms that will further strengthen European defense capabilities.

Role of the US Between Expectations and Reality

When, last year in Munich, representatives of the U.S. administration urged Europe to take greater responsibility for its own security and announced that transatlantic aid would be limited if the Old Continent failed to respect freedom of speech, they were counting on Europe to learn to look after itself finally. Or was it perhaps the exact opposite? Weren’t these threats and warnings simply part of one of the many negotiating strategies adopted by President Trump, calculated on the assumption that his partner (if that term can be used here) would cave in? It could also have been a test to separate the more reliable partners from those less worthy of American attention. Many factors point to this—a prime example is Poland, which has long been among the leading countries investing in defense and is now closest to the “magic threshold” of 5% of GDP for defense spending that President Trump referred to. Furthermore, a permanent base for U.S. troops is likely to be established in Poland, as well as the deals with American manufacturers announced at the NATO summit in Ankara. These steps place Warsaw among the leaders not only of the Eastern Flank but of NATO as a whole—a development that has been met with high praise from Washington, which portrays Poland as a trustworthy partner.

It should come as no surprise that Poland—as well as the Baltic States and, in fact, the entire Eastern Flank—is investing more in defense in the face of Russian aggression against Ukraine. It is possible that one incentive for the U.S. to insist that Europe spend more on defense was an expectation that US firms would receive the contracts. Currently, European NATO members are bound to the U.S. by contracts worth approximately $300 billion, which translate into 195,000 jobs in the American defense industry. It should therefore not seem so unrealistic to imagine that, in the American vision, the rearmament of Europe would proceed largely through production in the U.S.

The European Union, however, has decided to use the current situation not only to strengthen its domestic defense industry but also to improve Europe’s economic competitiveness in global markets. That is why the ReArm Europe / Readiness 2030 plan aims to support European defense production and industry, while non-EU partners seeking to sign contracts face numerous restrictions—such as a 35% limit on the share of non-EU components. Of course, there is also a backdoor in the form of special agreements with non-EU countries, which can, for example, join the SAFE program—as Canada has done (also hoping to secure numerous contracts in Europe) and as the United Kingdom is attempting to do.

However, the key question remains: Is Europe capable of defending itself and producing that much equipment in such a short time? At this point, this does not seem possible without U.S. involvement. This applies in particular to the nuclear umbrella, the missile defense shield, the deterrent effect of the stationing of U.S. troops in Europe, and the advanced technologies offered by U.S. defense companies. The next question, then, is whether Europe can continue to count on support from the U.S.? The latest U.S. National Security Strategy may cause some concern in Europe, as might the reduction in U.S. activity within NATO. That is precisely why initiatives such as ReArm Europe / Readiness 2030 are so crucial for Europe today.

Featured Image: © European Union, 1998 – 2026, Attribution, via Wikimedia Commons