EU countries call on European Investment Bank to increase defence funding

Belgium and 18 other EU member states have called on the European Investment Bank (EIB) to invest more in defence. In light of Russia's war against Ukraine, Europe urgently needs to arm itself better and strengthen the defence industry, they argue ahead of a European meeting on defence next Monday.

"In light of the ongoing security challenges facing Europe, including Russia's war against Ukraine, it is crucial that we take decisive action to strengthen Europe's overall defence readiness and capabilities and its defence industrial base," the 19 member states argued in a letter they sent to the EIB this week at the initiative of Finland.

The EIB has already greatly expanded its activities in the defence sector in recent years. Last year, the bank invested one billion euros and this year it wants to double that amount. However, the EIB must limit its lending to projects that have both military and civilian applications (dual use), such as drones or radar systems. Investing in weapons or ammunition is not part of its mandate.

The 19 member states argue that the EIB should review its list of excluded activities and sectors and be allowed to issue defence bonds. They do acknowledge that the investment bank should consult with financial markets and credit rating agencies in any expansion of its activities so as not to jeopardise its strong credit rating.

The EIB's shareholders are the 27 EU member states. Austria, Bulgaria, Hungary, Ireland, Luxembourg, Malta, Portugal and Poland, which currently holds the EU presidency and should take on a more neutral role, did not sign the letter.

 

Illustration © BELGA PHOTO Tetiana DZHAFAROVA / AFP


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