Southern European countries have expressed opposition to a proposal to boost military spending through loans, according to a report

Southern European states have been pushing back against an EU plan to ramp up military spending through loans, amid concerns it could deepen their already heavy debt burdens, Politico reported on Wednesday.

The so-called 'ReArm Europe Plan', unveiled this month by European Commission President Ursula von der Leyen, calls for up to €800 billion ($850 billion) in debt and tax breaks for the bloc's military industrial complex. The proposal includes a €150 billion loan package and an emergency clause to loosen EU fiscal rules.

However, according to unnamed EU diplomats cited in the report, some countries have "serious doubts" about taking on additional debt. France, Italy, and Spain have been reportedly advocating grants - or so-called 'defense bonds' - rather than loans.

Such bonds would require joint EU borrowing on capital markets, a move that needs unanimous approval from all 27 member states.

Von der Leyen has so far avoided backing the idea, wary of opposition from fiscally hawkish states like Germany and the Netherlands, who fear it could set a precedent for shared EU debt.

"No Eurobonds," Dutch Prime Minister Dick Schoof said after a recent EU leaders summit.

Italian Prime Minister Giorgia Meloni criticized the plan's reliance on national debt, calling the proposed April deadline "a bit too close" and saying "we should have more time [to decide]."

Italy and Spain have also urged a broader definition of military spending exempt from EU fiscal limits. Madrid has proposed including border control, cybersecurity, and infrastructure resilience.

France does not plan to trigger the emergency clause, two EU diplomats said, citing concerns over market reactions and its debt-to-GDP ratio above 110%. Germany is expected to invoke the clause to help fund a €500 billion military expansion but is unlikely to take EU loans since it can raise the money more cheaply on its own.

However, weaker economies have raised concerns that requesting EU loans first could signal financial vulnerability and drive up borrowing costs.

Brussels insists the 'ReArm' plan is aimed at countering a "threat" from Russia, an idea Moscow has dismissed as baseless. It also comes amid growing pressure from Washington. US President Donald Trump has distanced himself from supporting Ukraine, while urging the EU to take greater responsibility for its own defense.

(RT.com)