We had a very good meeting today. Thank you very much, António, for organising it, it was timely, and it was a very substantive exchange. First, we discussed our transatlantic partnership. This remains our most consequential relationship. It is fundamental to promoting peace, security and prosperity. And against the backdrop in which there is a lot at stake, we discussed ways to strengthen a very pragmatic cooperation with the United States. There are clearly new challenges and growing uncertainties, so the European Union is prepared for a robust but constructive dialogue with the United States. But we also recognise potential challenges in the relationship with the United States, and we are ready for that. When targeted, unfairly or arbitrarily, the European Union will respond firmly. This weekend we witnessed how steep tariffs were imposed on Canada and Mexico, those tariffs raise business costs, they harm workers and consumers, they create unnecessary economic disruption and drive inflation. We do not see much good coming out of this. So we prioritise productive discussions and early engagements. At the same time, the European Union remains also steadfast in its multilateral commitments, be it from our development aid to our climate targets. And of course, we are fully aware of the fact that we have our own challenges that we have to master. We have to do our homework. So it was very clear today that we also would focus on the competitiveness of the European Union. As I have laid out in the Competitiveness Compass, we have a whole roadmap to work on. This was the backdrop of this whole discussion.
This is also where our discussion today on defence comes in timely. The threats we face today are real. They are growing. And they come in many forms. From Russia's war of aggression in Ukraine, you mentioned the cyberattacks and the attacks on our critical infrastructure. We must prepare and respond together, as Europeans. We must be stronger in defence. Europe needs basically a surge in defence. And for that our defence industrial base must be strengthened. This means: First, our defence spending must increase up from the current average 1.9% of GDP. For so for many years, we have underinvested in defence. There is thus a great urgency to increase the defence spending with a big magnitude. For this, we first of all need more public funding. I am willing to explore and will use the full range of flexibilities we have in the new Stability and Growth Pact to allow for a significant increase in defence spending. Furthermore, the second leg would be that we are working with the EIB to increase the flexibility of lending practices. The EIB is willing to do that. They say, rightly so, that what they need is flagship projects on the table of the EIB. And, of course, we need more private funding, so we need to have a dialogue with the private banking sector, so that it modernises its lending practices. Second, our coordination in defence must be strengthened. For instance, through joint procurement ensuring inter-operability that brings down costs and gives us scaling opportunities and advantages. Third, we must simplify our legislation, so we will look into the procurement legislation – into what we can speed up and how we can simplify. The fourth element we discussed was that we need to foster defence innovation, including through increased cooperation with the Ukrainian defence industry. It is amazing to see how fast the Ukrainian industry has been built up, for example with cheaper, faster and more intelligent drones. So our defence industry can learn a lot from the Ukrainian defence industry that has the experience of the battlefield every single day. And finally, what was very important for all of us in the discussion was: If we spend billions and billions of taxpayers' money, we need return on investment in the form of increased know-how and good jobs here in Europe.
As said, the Commission will present a White Paper on the Future of European Defence by March. Starting with our discussions today, with the White Paper, there will be a basis for Member States to take the necessary decisions in June.
Strengthening our cooperation in defence also means deepening our partnerships with NATO and non-EU European partners. This is why the participation of Mark Rutte at our lunch today was so timely.
In the same vein, it was very good to have a thorough discussion today with Prime Minister Keir Starmer. Because European security concerns us all, inside and outside the European Union. We already have a strong cooperation in place. Bilaterally, as G7 members and as part of the Alliance. Now we are ready to discuss deeper cooperation, notably in security and defence. And we will discuss the structure and format of such a deeper cooperation and other topics at our joint defence summit in the UK Summit in May.
Now, we need to set a lot of initiatives in motion. And Donald, I am so glad to have you as the rotating Presidency, because I know we can rely on you and the dynamics. You have made security the central theme of your Presidency, and rightly so. I know we can count on the energy and dedication of the Polish Presidency to drive this topic forward.
