EU defense budget plan excludes Israel’s arms industry

Israel can find itself excluded from the list of eligible countries to obtain contracts funded by the new loan fund worth 150 billion euros under the “preparedness 2030” plan, according to the draft proposal revealed in Brussels yesterday.

In the past few months, behind the scenes, there has been tightening a rope between France and Germany on the question of whether the funds were from the fund – which is a revolution in the amount that the European Union countries will spend – to buy manufactured equipment outside the European Union. The French, who have an advanced arms industry, demanded that the fund completely invest within the European Union. The Germans, who bought the air defense system from Israel 3, rented drones from Israel to billions of euros, announced an intention to purchase national air defense systems from the United States, and demanded that only part of the fund to be allocated for purchases within the European Union, the rest should be spent in other countries.

The proposal project, which was released yesterday, shows that the French have prevailed. The main headlines in Europe announced that the decision excludes American, UK and Turkish arms industries from European purchases in billions of euros, but Israel will also be outside the fence.

According to the proposal, 65 % of the cost of buying defense systems in countries in EFTA (European Free Trade Association), which consists of European Union countries in addition to Norway, Iceland, Switzerland and Lestenstein, as well as Ukraine.

The remaining 35 % can be spent in other countries, but only if they signed a security partnership and defense agreement with the European Union. South Korea, Japan and the United Kingdom are expected to sign such agreements, but the United States is not, because of the fear that it will not allow countries to sell certain weapons systems.

Israel and its defense companies are responsible for finding itself torn between the requirements of the European Union and the security alliance with the United States, which will prevent the signing of such a strategic agreement and depriving them of billions of euros in potential sales. The European Union plan also excludes the possibility of purchasing fully designed weapons systems in a country that is not in EFTA or has not signed an agreement.

The plan is currently for the loan fund worth 150 billion euros for defensive spending, but there are those who see it expanding to 500 billion euros or more.

The proposal, as he presented, is not permanent, in addition to Germany, whose representative to the European media yesterday said, “We do not want to give the impression that we seek to separate from the United States,” Poland also opposes the “European purchase” approach. On the other hand, France and Italy welcomed the settlement, and said that the purchase of “Europe” defense systems would help the continent to develop military capabilities quickly, and will help in the process necessary to unify the defense industry in the continent. “We must buy more Europeans,” Ursula von der Lynn said.

The European Union countries are currently spending about 80 % of the defense purchases budgets outside the European Union, to a large extent in the United States. The European Union's plan, as it was not final, and may be subject to changes before placing it in the 27th member vote in the bloc.

It was published by Globes, Israel Business News – En.globes.co.il – on March 20, 2025.

© Copy Publish Publisher Itonut (1983) Ltd. , 2025.