EIB to relax rules for defence investments
The European Investment Bank (EIB) is relaxing its rules to facilitate support for European defence projects. The EU's financing body announced that it will open up its funding to more dual-use technologies, that can be used for both civilian and military applications.
As the Russian invasion of Ukraine highlighted the need for a robust European defence capacity, European member states had asked the European Investment Bank (EIB) during a summit meeting in late March to relax rules on defence investment. The goal is to stimulate the European defence market and thus make Europe less dependent on foreign equipment suppliers. The EIB now has a proposal ready.
The EU's financing body, based in Luxembourg, doesn’t have the authority to fund armament activities in the strict sense, such as munitions or missiles, but it has until 2027 a budget of €6 billion for loans to develop dual-use goods, such as drones or vehicles, of which some versions can be deployed on the battlefield.
Until now, the EIB, whose shareholders are the EU member states, needed to ensure that at least half of a project's expected revenues were derived from civilian use in order for it to be eligible for financing. This limitation is abolished in the new plan. Loans may in future be granted on condition that there is a civil application for the technologies concerned, without setting any percentage. This greater flexibility will speed up the deployment of the €6 billion for defence.
The EIB also proposes to extend the access to EIB loans to small and medium-sized enterprises active in the defence sector, which until now were completely excluded. In addition, a one-stop shop and a task force will be set up to speed up procedures. This one-stop shop should be operational in May and the full action plan could be deployed in June.
Broad support
EIB President Nadia Calviño presented the proposal to the EU finance ministers at a meeting in Luxembourg on Friday. "The EIB's plan has received broad support,” stressed Belgian finance minister Vincent Van Peteghem, who led the meeting because of the Belgian Presidency of the EU Council. Discussions are still needed on certain points, but the ministers wish to continue along this path, added Van Peteghem.
The plan still needs to be officially approved by the EIB's board of directors and by the member states. The EU finance ministers will discuss the topic again on 21 June, as part of a meeting of the EIB’s board of governors.
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