Addressing lawmakers in Strasbourg, von der Leyen said Europe's security order was "being shaken," suggesting the continent could no longer rely on "America's full protection".

"The time of illusions is now over. Europe is called to take greater charge of its own defence," the European Commission president told the EU's parliament.

"We need a surge in European defence. And we need it now."

Brussels has already sent a clear signal it is moving in that direction, with EU leaders last week endorsing a commission plan aimed at mobilising up to 800 billion euros ($860 billion) to boost defence spending.

The defence plan proposes to provide members with EU-backed loans of up to 150 billion euros and eases fiscal rules to allow states to spend much more.

Von der Leyen indicated Tuesday the loans should be directed towards reinforcing "strategic capability" domains within Europe's own defence industry.

"These loans should finance purchases from European producers, to help boost our own defence industry," she said, with multiannual contracts to give industry "predictability" and "a focus on joint procurement."

It was not immediately clear whether this would include non-EU producers such as the United Kingdom, Norway, Switzerland or, further afield, Turkey.

European governments are under pressure to step up on defence as US President Donald Trump questions whether the United States -- the guarantor of Europe's security since World War II -- should continue its central role in NATO.

- 'Restore deterrence' -

Trump's pivot away from the United States' transatlantic partners comes as he seeks a rapprochement with Russia to end the Ukraine war -- raising fears Kyiv could be forced into an unfavourable deal.

Stating that Russian President Vladimir Putin "cannot be trusted" but only "deterred", von der Leyen noted that the Kremlin was spending more on its military "than all of Europe combined".

"We all wish we could live in more peaceful times. But I am confident that, if we unleash our industrial power, we can restore deterrence against those who seek to do us harm," she said.

"It is time to build a European Defence Union that ensures peace on our continent through unity and strength."

The commission plan also allows member states to repurpose so-called "cohesion" funds intended for the development of poorer European countries and lifts curbs on defence investments by the bloc's lending arm, the European Investment Bank.

Discussions on how to increase the bloc's military might are to continue at a summit in Brussels next week, with the commission to present a white paper ahead of time with further options to "substantially boost financing for European defence."

"The European Council will continue to take work forward to build our deterrence, to strengthen the security of our continent," Antonio Costa, who heads the body bringing together the 27 EU states, told lawmakers in Strasbourg.

Tuesday's EU parliament debate saw several lawmakers back calls for more ambitious EU-wide joint borrowing -- a tool used to confront the Covid pandemic, but until now ruled out by several member states including Germany.

The commission has so far steered clear of advocating such a step.