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EU capitals have agreed to launch a €150bn loans-for-arms fund backed by the bloc’s shared budget, in a landmark shift for Brussels spurred by Russia’s war against Ukraine and US President Donald Trump’s demands for Europe to spend more on its own security.

The initiative, which will allow EU countries to borrow from Brussels and spend on weapons systems and platforms through joint procurement, was proposed by the European Commission earlier this year as a means to speed up the continent’s rearmament.

It secured political agreement from capitals on Monday morning, three officials familiar with the decision told the Financial Times, after months of haggling over the details of how the money can be spent. It will be formally agreed on Wednesday, the officials said.

This is a developing story