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EU member states ask EIB for rearmament financing

by AI | 31.Jan 2025 | Europe in brief AI

Belgium and 18 other EU member states have called on the European Investment Bank (EIB) to invest more in defense. In light of the Russian war of aggression against Ukraine, Europe must urgently rearm and strengthen the defense industry, they argue, ahead of a closed European summit on defense next Monday.

A fighter jet at an air force base in Bulgaria (BTA Photo, Vladimir Shokov)

“In light of the ongoing security challenges Europe faces, including Russia’s war of aggression against Ukraine, it is crucial that we take decisive measures to strengthen overall preparedness and defense capabilities as well as the defense-industrial,” state the leaders of the 19 member states in a letter they sent to the EIB this week on Finland’s initiative.

The EIB has already significantly expanded its activities in the defense sector in recent years. Last year, the bank invested 1 billion euros and this year it wants to double that amount. The EIB must, however, limit itself to providing loans for projects that have both military and civilian applications (dual use), such as drones or radar systems. Investing in weapons or ammunition does not fall within its mandate.

The 19 member states argue that the EIB should review its list of excluded activities and sectors and should be able to issue defense bonds. They do acknowledge, however, that the investment bank must consult with financial markets and credit rating agencies if it were to expand its activities, so as not to jeopardize its strong credit status.

Austria, Bulgaria, Hungary, Ireland, Luxembourg, Malta, Portugal, and Poland, which currently holds the EU presidency, did not sign the letter. They, like the other member states, are shareholders of the EIB.