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Germany, France lead call for EIB to step up defence financing

Germany, France lead call for EIB to step up defence financing
Nadia Calvino, president of the European Investment Bank, during a news conference at an informal meeting of European Union economic and financial affairs ministers in Ghent, Belgium, on 23 February 2024.

Germany and France joined 12 other European Union countries in calling for the European Investment Bank to enhance its financing for defence as a means to boost the bloc’s security in light of Russian aggression. 

The countries sent a letter dated 17 March to EIB president Nadia Calvino, European Council President Charles Michel and Belgian Prime Minister Alexander De Croo calling for a new financing strategy, according to a copy of the letter seen by Bloomberg. EU leaders will meet on 21-22 March to discuss security, including the EIB’s role in defence readiness.

The letter comes as Ukraine is struggling to acquire more ammunition and convince allies to give more aid. Bloomberg reported this month that the EIB was considering ways to expand its support for the defence industry. 

“We need to explore different possibilities that would enable the EIB to invest in defence related activities beyond existing dual-use projects,” the letter said. “This would mean discussing and re-evaluating current definitions of dual-use projects and the list of excluded activities as well as reconsidering its defence industry lending policy and other restrictive elements.”

Leaders from Finland, Bulgaria, Czech Republic, Denmark, Estonia, France, Germany, Italy, Latvia, Lithuania, the Netherlands, Poland, Romania and Sweden signed the letter.

The EU’s lending arm is in talks with the bloc’s executive and other stakeholders to begin investing in military companies that produce defensive products, Bloomberg reported

The leaders said in the letter that a new EIB policy could have a “signalling effect” that would promote further private investments and make this type of lending more acceptable for financial markets and banks. 

“As it stands, the EIB’s financing for security and defence is, however, limited to dual-use projects,” according to the letter. “The EIB’s Strategic European Security Initiative and the recent EIF Defense Equity Fund are welcomed initiatives but these form only a very small share of the EIB’s current activities.”

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