EU leaders scramble to finance defence as Trump pivots from Ukraine

European leaders gathered in Brussels on Thursday for an emergency summit that laid bare the continent's scramble to finance its own defence after Donald Trump's administration froze military aid to Ukraine and signalled a broader retreat from European security guarantees. The meeting produced agreement on a 150 billion euro joint borrowing facility and a pledge to relax the EU's fiscal rules for defence spending, but exposed deep fractures over nuclear deterrence, Hungarian obstruction and the sheer scale of the capability gap left by Washington.

The Trump shock forces Europe's hand

The summit was convened in direct response to the White House's decision to pause military assistance to Kyiv and the president's repeated demands that NATO allies raise defence spending from two percent of GDP to five percent. According to NATO data, the United States supplied more than 40 percent of military aid to Ukraine last year, including air defence systems, long-range artillery and intelligence sharing that European arsenals cannot yet replicate. That dependency was the unspoken subtext of every bilateral conversation in the Europa building.

Poland's Donald Tusk, whose country spends more than four percent of GDP on defence and borders the Russian exclave of Kaliningrad, set the tone on arrival. "Europe must take up this challenge, this arms race. And it must win it," he said, adding that Europe as a whole is stronger than Russia in military, financial and economic terms. His confidence was not universally shared. Germany's outgoing chancellor Olaf Scholz struck a more cautious note: "We must ensure, with cool and wise heads, that US support is also guaranteed in the coming months and years, because Ukraine is also dependent on their support for its defence."

Von der Leyen's 800 billion euro blueprint

The centrepiece of the Commission's response is a five-part plan to mobilise roughly 800 billion euros for European defence over the coming years. The first pillar, a 150 billion euro loan facility backed by the EU budget, would lend to member states for joint procurement of air defence, artillery, missiles and drones. The second relaxes the Stability and Growth Pact's deficit and debt rules for defence investment, giving governments fiscal space they have not enjoyed since the euro crisis. Ursula von der Leyen presented the package as a "rearm Europe" effort that respects national sovereignty while pooling demand.

The numbers are striking but the mechanics remain opaque. The 150 billion euro facility requires unanimous Council approval and a qualified majority in the European Parliament. The fiscal flexibility clause must be triggered by the Commission and can be reversed if a member state's debt trajectory becomes unsustainable. Several diplomats noted that the 800 billion euro figure includes private capital mobilisation, national budget reallocations and the European Investment Bank's existing lending capacity, not new EU money. "It is a framework, not a cheque," one senior official said.

France opens the nuclear door

The most consequential political signal came from Paris. In a televised address on Wednesday evening, Emmanuel Macron declared that Russia had become a threat to all of Europe and announced France was "open to discussing" extending the protection of its nuclear arsenal to European partners. France is the only EU nuclear power since Brexit; its force de frappe comprises roughly 290 warheads deliverable by submarine-launched ballistic missiles and air-launched cruise missiles. The proposal breaks a decades-old taboo: French doctrine has always held that the deterrent protects only French vital interests, decided solely by the French president.

Reactions ranged from enthusiastic to sceptical. Lithuania's Gitanas Nauseda called a European nuclear umbrella "really very serious deterrence toward Russia." Poland said the idea was worth discussing. Germany, however, stressed the need to keep the United States involved, reflecting both its reliance on US nuclear sharing under NATO and a political reluctance to appear to decouple from Washington. The discussion will continue at a subsequent European Council meeting, but no formal mechanism exists to extend French deterrence without treaty change or a new political agreement among all 27.

Germany rewrites its debt brake

The most concrete domestic shift came from Berlin. On Tuesday, the parties negotiating Germany's next coalition, Friedrich Merz's CDU/CSU and the SPD, agreed to amend the constitution's debt brake to exempt defence spending above one percent of GDP from the structural deficit limit of 0.35 percent. The move unlocks potentially hundreds of billions of euros in additional borrowing for the Bundeswehr and for support to Ukraine. Merz, who will likely become chancellor this month, said he had "no illusions" about Trump and that Europe must achieve strategic autonomy. The reform requires a two-thirds majority in the Bundestag and Bundesrat, which the outgoing coalition can still muster before the new parliament sits.

This marks a historic rupture for a country that has treated the debt brake as fiscal orthodoxy since 2009. It also answers a direct US demand: Trump has singled out Germany for spending too little on defence. Yet the money will take years to translate into deployable capabilities. Germany's defence industry, consolidated around Rheinmetall, Krauss-Maffei Wegmann and Hensoldt, has warned that production lines for artillery shells, armoured vehicles and air defence systems need multi-year contracts before they can expand.

Orban's veto threat and the unity problem

Hungary's Viktor Orban arrived in Brussels making clear he would not sign a unanimous statement condemning Russia or pledging unlimited support to Ukraine. The Hungarian prime minister, who maintains warm relations with both Trump and Vladimir Putin, argued that the EU should focus on its own defence spending rather than "prolonging the war." He did, however, endorse the Commission's defence financing package. The split means any joint declaration on Ukraine will likely be issued by 26 leaders, sidelining Budapest, a format used repeatedly since 2022 but one that undermines the EU's claim to speak with one voice.

Orban's leverage is amplified by the unanimity requirement for foreign policy decisions and for the 150 billion euro loan facility's legal base under Article 212 TFEU. Diplomatic sources said workarounds are being prepared, including enhanced cooperation among willing member states or a Council decision under Article 28 TEU that binds only those who opt in. Both options dilute the symbolism of a united EU response.

Zelensky's European army call and the peacekeeping question

Volodymyr Zelensky, welcomed warmly by Antonio Costa and von der Leyen in deliberate contrast to his Oval Office clash with Trump, thanked leaders for standing by Ukraine. "We are very thankful that we are not alone. And these are not just words," he said. He renewed his call for a European army, arguing the continent can no longer count on Washington. The idea has no legal basis in the treaties and faces opposition from neutral members such as Ireland, Austria and Malta, but it reflects a growing sentiment that ad hoc coordination is insufficient.

The summit also discussed deploying an EU force to guarantee any future peace settlement in Ukraine. France and Britain have proposed a one-month truce in the air, at sea and on energy infrastructure, though not initially on the ground. Keir Starmer, who hosted a "coalition of the willing" meeting in London last weekend, said European nations must be ready to put troops on the ground if a ceasefire holds. No decision was taken on Thursday; the legal mandate, rules of engagement and command structure remain entirely unresolved.

The capability gap that money cannot close quickly

Beneath the political declarations lies a harder reality: Europe lacks the industrial capacity to replace US systems in the near term. Air defence is the starkest example. The Patriot and NASAMS batteries protecting Ukrainian cities are US-made; European alternatives such as IRIS-T SLM and SAMP/T are in production but at volumes measured in single-digit batteries per year. Long-range strike capabilities, ATACMS, Storm Shadow/SCALP, depend on US components or US export licences. Intelligence, surveillance and reconnaissance satellites are overwhelmingly American. The 800 billion euro plan, even if fully realised, addresses procurement budgets, not the decade-long lead times for new weapons systems.