BRUSSELS - The European Commission proposed on Tuesday new joint EU borrowing of 150 billion euros ($157.76 billion) to lend to EU governments for defense as part of an overall 800 billion total financing effort to boost Europe's defense capabilities.

The 150 billion euros of new joint borrowing is to go towards building pan-European capability domains like air and missile defense, artillery systems, missiles and ammunition, drones and anti-drone systems or to address other needs from cyber to military mobility, the Commission said.

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"It will help Member States to pool demand and to buy together. This will reduce costs, reduce fragmentation increase interoperability and strengthen our defense industrial base," Commission President Ursula von der Leyen said.

EU leaders will discuss the proposal at a special summit devoted to defense spending on Thursday.

The Commission also proposed to lift limits imposed by EU rules on government spending in case of defense investments.

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"If Member Sates would increase their defense spending by 1,5 percent of GDP on average this could create fiscal space of close to 650 billion euros," von der Leyen said.

The Commission also proposed that EU countries can use for defense purposes money they receive from the EU budget in funds to equalize the standards of living across Europe.

All these elements could provide up to 800 billion euros for EU governments to spend on defense projects.

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"Europe is ready to assume its responsibilities. Europe could mobilize close to 800 billion euros for a safe and resilient Europe. We will continue working closely with our partners in NATO. This is a moment for Europe. And we are ready to step up," she said.

The Stoxx Europe Aerospace and defense index rose on the news to 2284.88 from 2265.36.