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The European Union is considering the possibility of joint defense financing! Here's how the revenue is planned to be collected
2025-03-10 19:07:16 / BOTA
European Union finance ministers began discussions on Monday on ways to raise defense financing through joint borrowing, existing EU funds and greater involvement of the European Investment Bank.
The ministers' talks follow a meeting of European leaders last Thursday, following US President Donald Trump's decision to freeze military aid to Kiev, which also raised doubts about Washington's commitment to European allies.
Polish Finance Minister Andrzej Domanski, who is leading the discussions, said the summit confirmed "the absolute political will to make Europe more responsible for its security and to find money for a major rearmament of Europe."
The ministers will work on a European Commission proposal for the EU to raise 150 billion euros to lend to governments for joint defense projects - a deal that Germany immediately supported.
"What Germany is very open to and what we have explicitly supported is that, whenever we have truly European projects in the field of defense, we also think about joint financing," said German Finance Minister Joerg Kukies.
One of the contentious issues related to joint borrowing is who will buy the weapons systems from. France leads the group of countries that prefer to buy from European companies, while Germany is more open to buying from outside Europe.
This long-standing dilemma became more serious after Washington cut off Ukraine's access to intelligence data, ammunition and other equipment, raising concerns that it could do the same to other countries and rendering some advanced weapons systems unusable.
"It is very important that the funds are used to purchase European products that are part of our strategic autonomy," said French Finance Minister Eric Lombard.
To remove EU obstacles, the Commission has proposed allowing all 27 EU governments to increase defense spending by 1.5 percent of gross domestic product (GDP) each year for four years, without triggering the disciplinary measures foreseen by EU debt rules.
Ministers will also discuss expanding the existing definition of defence spending, which currently only includes military equipment. Under current rules, building munitions factories or strengthening roads and bridges to allow tanks to pass through are not considered defence spending, and many governments want to change this./ REL
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