Europe must move beyond fragmented national approaches to a shared framework for financing defence

The Brussels Institute for Geopolitics (BIG) welcomed Clément Beaune, French High Commissioner for Strategy and Planning, for the Brussels leg of his presentation of the new policy note “How to Finance Rearmament and Our Other Priorities by 2030”. 

In conversation with BIG Director Luuk van Middelaar, Beaune assessed Europe’s readiness for today’s security challenges and how it should be financed. It was followed by a discussion with leading policymakers, defence experts, diplomats, the private sector and journalists. 

Beaune argued that Europe must move past fragmented national approaches and commit to a common framework for defence financing. He called for a European loan of around €500 billion to fund joint acquisitions and boost shared industrial capacity. 

 “A European loan to support defence efforts would go beyond a simple financial initiative. By enabling joint funding, shared acquisitions and coordinated industrial programmes, it would represent a true European geopolitical project.” 

This level of investment, he commented, would still be far below the Covid-19 recovery fund and be more politically sustainable than relying on overstretched national budgets. 

France, for its part, has consistently outspent many EU partners on defence. With a target of 3.5% of GDP by 2030 (up from 2%), the country faces a steep fiscal challenge. As Beaune noted, spending on this scale in France has not happened since 1970. 

He welcomed Germany’s decision to invest more in defence under Chancellor Friedrich Merz (who has pledged to make the Bundeswehr Europe’s strongest conventional army). Such national ambitions, Beaune argued, must be embedded in a coordinated European strategy that balances security with the sustainability of Europe’s social and ecological model. 

To that end, he proposed a ‘Security and Defence Pact’, akin to the EU’s budgetary framework (the Growth and Stability Pact), to ensure long-term coordination and accountability. 

“We suggest establishing European governance over defence financing efforts similar to the one used for the budget. This would allow for concrete monitoring and help sustain momentum over time.” 

He also made the case for a ‘European 1%’ target, under which each Member State would dedicate at least one per cent of GDP to purchasing defence equipment made within the EU by 2030. 

On the industrial side, Beaune proposed transforming the European Defence Agency into a more empowered “European DGA” (modelled on France’s Direction Générale de l’Armement), capable of leading integrated procurement and fostering industrial specialization across Member States. Europe, he warned, must avoid the inefficiencies seen in its space sector and build a truly cooperative defence base. 

Although national governments will ultimately have the final say on defence, Beaune underscored the need for clearer governance across EU institutions, whether through defence and finance ministers in the Council, the Commission or a beefed-up European Defence Agency. He also called for a greater role for the European Investment Bank and for the European Bank for Reconstruction and Development in strengthening Europe’s security infrastructure. 

Progress, he argued, depends on rallying national governments and Europeans at large towards a truly coordinated approach in the face of unprecedented threat. Poland and Germany—alongside France—will be central players, and the UK must be involved in any credible framework. But lasting impact will only come from a European solution that is politically coherent, financially sustainable and industrially integrated.