France Launches €450M Defence Fund Amid Rising Military Spending Concerns

France's public investment bank, Bpifrance, is set to inaugurate a €450 million defence-focused fund as part of France's increased military spending efforts. This move comes amid heightened fears of reduced U.S. protection and continued Russian aggression. Challenges arise due to France's strained budget and high public deficit.

France's public investment bank, Bpifrance, is gearing up to launch a €450 million ($490 million) fund aimed at bolstering the country's defence capabilities, Finance Minister Eric Lombard announced on Thursday.

Lombard's disclosure precedes a significant address where he will delineate strategies for financing military expenditures amidst increasing concerns over Russian threats and the ongoing uncertainty regarding U.S. protection. French citizens can invest in this long-term initiative through contributions starting at €500, Lombard suggested during an interview with TF1.

The heightened focus on defence arises as France leads European rearmament initiatives amid fears of expanded Russian influence and a potential Washington-Moscow rapprochement. However, the challenge of financing this military expansion looms large as France wrestles with a high public deficit and debt, ECB member Francois Villeroy de Galhau remarked. He stressed the necessity of disciplined spending, contrasting the defence buildup to previous COVID-19 emergency measures.

(With inputs from agencies.)