EU Defence Fund Talks: A New Era for Military Investment

The EU finance ministers discuss the creation of the European Defence Mechanism, a fund to purchase and own defence equipment. This initiative aims to increase defence spending without elevating national debt, especially benefitting highly-indebted countries, and preparing for potential threats from Russia.

The European Union is considering a joint defence fund, dubbed the European Defence Mechanism (EDM), aimed at purchasing and owning defence equipment. This initiative seeks to bolster defence spending without inflating national debts, providing a financial cushion for heavily indebted nations.

The proposal, put forth by the Bruegel think tank, represents part of a wider European strategy to secure itself against potential Russian threats amid concerns about relying too heavily on the United States. According to Portuguese Finance Minister Joaquim Miranda Sarmento, the plan is feasible as it's modeled after existing European financial mechanisms.

The EDM would function under an intergovernmental treaty, pooling resources and lowering equipment costs by creating a unified defence market. This market integration could reduce dependency on the U.S. by 2030, promoting Europe-wide military cohesion and enhancing strategic capacity.

(With inputs from agencies.)