EU Finance Ministers to Discuss Groundbreaking European Defence Fund

EU finance ministers are set to discuss the creation of the European Defence Mechanism, a joint intergovernmental fund to procure defence equipment without increasing national debt. A proposal by Bruegel suggests pooling resources to enhance military capabilities and reduce reliance on the U.S. for European defence.

European Union finance ministers will convene this week to deliberate the establishment of a joint intergovernmental defence fund. This initiative aims to collectively purchase and own defence equipment while imposing usage fees on member states, as detailed in a preparatory paper for their meeting.

The proposal, crafted by the Bruegel think tank and commissioned by the Polish EU presidency, addresses pivotal defence funding concerns, notably its impact on member states' national debts. This comes amidst discussions on securing Europe against potential threats, particularly from Russia, as EU nations reconsider the extent of their reliance on U.S. security provisions.

In line with these efforts, the EU is planning an increase in military expenditure, with an 800 billion euro package over the next four years. This will include loosening fiscal constraints and initiating joint borrowing for massive defence projects secured by the EU budget. Supplementing this, the European Defence Mechanism aims to consolidate a fragmented defence procurement landscape, thus enhancing cost efficiency and resource accessibility.

(With inputs from agencies.)