EU Nations Urge EIB to Boost Defence Funding Amid Russian Threat
Nineteen EU countries, including France and Germany, are urging the European Investment Bank to increase defence industry lending. The proposal, which could lift current prohibitions on funding military equipment, comes as the EU seeks to strengthen its military capabilities against potential Russian aggression.
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Nineteen European Union countries, led by France and Germany, are advocating for the European Investment Bank (EIB) to expand its lending capabilities to the defence sector. This move comes as the EU looks to enhance its military capabilities in light of a possible future threat from Russia.
The call for action was made in a joint letter ahead of EU leaders' discussions about the future of the EU defence sector. This comes against the ongoing backdrop of Russia's invasion of Ukraine and past demands by U.S. President Donald Trump for NATO allies to increase defence spending. Currently, the EIB is barred from financing ammunition, weapons, or military equipment. Altering this prohibition would require the agreement of a majority of EU governments, although some express concerns over the move.
The EIB has traditionally financed dual-use products with civilian and military applications, such as satellites, drones, and radar systems. In a letter to the European Council president and the head of the bank, several countries recommend that the EIB re-evaluate its list of excluded activities and consider defence bonds. However, some nations worry that such a change could impact the bank's credit rating and investor confidence.
(With inputs from agencies.)