Belgium is one of the 19 European Union (EU) Member States to call on the European Investment Bank (EIB) to invest more in defence. The countries argue that, given current (geopolitical) challenges facing the bloc, the EU must better arm itself.
Outgoing Belgian Prime Minister Alexander De Croo (Open VLD) and leaders of 18 other EU countries signed the joint letter sent to the EIB on Thursday, at the initiative of Finland. In it, the heads of state pointed to several concerns that make it critical for the continent to better arm itself.
"In light of the ongoing security challenges facing Europe, including Russia's war of aggression against Ukraine, it is crucial that we take decisive action to strengthen Europe's overall defence readiness and capabilities and its defence industrial base," the letter read.
"We should also enhance our capabilities to address hybrid threats such as securing critical infrastructure, which poses particular challenges."
The leaders argued that, within the security and defence financing ecosystem, the EIB plays a key role in providing investment funding and leveraging private funding in the EU. They noted that this is essential for safeguarding the continent's future.
Expanding projects
The EIB has already greatly expanded its activities in the defence sector in recent years. Last year, the bank invested €1 billion and this year it wants to double that amount. However, its lending is now limited to projects that have both military and civilian applications (dual use), such as drones or radar systems. Investing in weapons or munitions is not part of its mandate.
The 19 Member States argue that the EIB should review its list of excluded activities and sectors and be allowed to issue defence bonds. "By expanding funding mechanisms and employing all available means, we can address the urgent need to grow Europe's defence industrial and technological base, ensuring it is capable of meeting both immediate and long-term challenges," they noted.
They do acknowledge that the investment bank should consult with financial markets and credit rating agencies in any expansion of its activities, so as not to jeopardise its strong credit rating.
The letter was signed by Belgium, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Romania, Slovakia, Spain and Sweden. It was sent ahead of a closed European summit on defence next Monday in Brussels.
