Filenews 6 December 2024
The creation of a common, European fund worth €500 billion; European Union countries are considering spending on defense and arms supplies by tapping into bond markets as part of an effort to boost the bloc's defense spending ahead of Donald Trump's return to the White House.
Trump's threat to withdraw U.S. security guarantees to NATO allies, which do not cover the military alliance's minimum spending amount, has prompted European capitals to explore more radical solutions to finance their defense, such as joint debt issuance, an option that has been ruled out many times in the past by the bloc's hardliners. such as Germany, the Netherlands and Denmark, as reported by the Financial Times.
However, today, senior European officials are considering a plan to create a European defence financing mechanism, which would issue bonds with guarantees from participating countries rather than the EU itself.
The funding model, which would allow countries outside the bloc such as the United Kingdom and Norway to participate, is gaining traction among a group of key EU member states, according to six sources cited by the FT.
Although the exact amount of the Fund's funds has not yet been agreed, those involved in the negotiations note that it should exceed €500 billion.
Greek Prime Minister Kyriakos Mitsotakis, who raised the issue of issuing eurobonds for defence earlier this year, told the FT there was a change of attitude among EU leaders. "There is a growing consensus that we need to spend more on defence and it may be time to create a common European mechanism to finance projects of common interest," he said.
Capital.gr
