Defense, leaders in Brussels seek “EIB reform” for more funding

Brussels – The European Investment Bank (EIB) gave its availability of financing more defence , and EU leaders now want to exploit this new scenario by looking at all new practices for the future of European security. The heads of state and government will meet in Brussels for the European Council summit, which, among other things, is intended to speed up the defence industrial strategy. “The Council will look at options for the future, and the EIB is one of them,” senior European officials pointed out.

As of December, 2023, it has been made clear that the EIB could play a key role. In the conclusions of that European Council meeting, the 27 leaders had given a clear indication of “a strengthened role of the European Investment Bank Group in support of European security and defence. “What was written in the past is different from now,” explained the EU sources close to the dossier. “The issue of funding is more concrete.”

More importantly, with an official letter, 14 member states have explicitly asked EIB President Nadia Calvino to increase funding for the defence industry and companies operating in the sector. Thus, half of the leaders who will gather in Brussels to address the sensitive issue are therefore poised for an unprecedented change of course, given that so far, the EIB’s mandate is to promote civilian projects or, at most, dual-use technologies, i.e., civil-military.

Bulgaria, Denmark, Estonia, France, Germany, Italy, Latvia, Lithuania, the Netherlands, Poland, the Czech Republic, Romania, and Sweden are ready to put the EIB at the centre of the new European strategy.

The signatories to the letter believe that this move may enable them to respond to the dual need posed by the Russian war in Ukraine: military support for Kyiv and European capacity to ensure its own security. “The message intended to be sent by this March summit is that we want to do more together, buy and produce, continue the senior EU officials. For this, the Commission has put €1.5 billion on joint purchases. “It’s a starting point,” they assured in Brussels, convinced that resources will increase when circumstances require.

The central role of the EIB appears to be established, especially since the body itself, in the investment agenda, has recalibrated its focus on dual-use technologies,” preparatory to a defence industrial strengthening. “Even with the current rules, the EIB would be able to finance more projects involving dual-use goods,” recalled Petteri Orpo, Prime Minister of Finland. “Supporting the EU defence industry is important for European competitiveness and also helps strengthen the internal market.”

The president of the European Council, Charles Michel, has, in fact, already put on the table the possibility of Eurobonds for defence as an alternative, if not supplementary, option. “I think that the reasoning will start, within the discussion of the problem,” which is precisely that of sustaining a sector that has become increasingly strategic, European officials continue. “The problem is that a country has already shifted its economy from peace to war.”