European Union countries must source military equipment from European producers under a new 150-billion-euro (USD 163 billion) loan programme, EU Commission President Ursula von der Leyen declared Tuesday. The initiative, aimed at bolstering the continent’s security independence, marks a shift from reliance on US suppliers, which currently dominate EU defence purchases.

Speaking to EU lawmakers, von der Leyen outlined the plan, debated by the EU’s 27 leaders at a summit last week. The loans will fund air defence systems, drones, “strategic enablers” like air transport, and cybersecurity enhancements. “These loans should finance purchases from European producers, to help boost our own defence industry,” she said, emphasizing multiannual contracts for industry stability and urging nations to buy jointly for greater impact.

The push comes as European NATO members, who’ve historically placed two-thirds of orders with US firms, face pressure from the Trump administration’s signals to shoulder their own—and Ukraine’s—security needs. Von der Leyen’s proposal is part of a broader “ReArm Europe” strategy, potentially mobilizing up to 800 billion euros (USD 874 billion) through relaxed budget rules and redirected EU funds.

France has called for increased funding and insists on European-only spending, while Spain, burdened by debt exceeding 100% of GDP, prefers grants over loans. The commission argues the plan benefits around 20 member states, offering cheaper borrowing than their national rates. EU leaders are set to finalize approval at a summit late next week.

Von der Leyen’s stance reflects a strategic pivot to strengthen Europe’s defence autonomy amid shifting global alliances. With media spotlight intensifying, the plan’s success hinges on balancing national interests and collective action, potentially reshaping the EU’s military-industrial landscape for decades.