(Bloomberg) — Germany and France have joined 12 other European Union countries in asking the European Investment Bank to increase defense funding as a way to strengthen the bloc's security in light of Russian aggression.
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The countries sent a letter on March 17 to EIB President Nadia Calvino, European Council President Charles Michel and Belgian Prime Minister Alexander de Croo, asking for a new financing strategy, according to a copy of the letter seen by Bloomberg. I asked for EU leaders will meet on March 21-22 to discuss security, including the EIB's role in defense preparedness.
The letter comes as Ukraine struggles to obtain more ammunition and persuade allies for more aid. Bloomberg reported this month that the EIB is considering ways to increase support for the defense industry.
“There is a need to explore various possibilities to enable the EIB to invest in defense-related activities beyond existing dual-use projects,” the letter said. “This means discussing and reevaluating the current definition of dual-use projects and the list of excluded activities, as well as revisiting military industry financing policies and other restrictive factors.”
The leaders of Finland, Bulgaria, Czech Republic, Denmark, Estonia, France, Germany, Italy, Latvia, Lithuania, the Netherlands, Poland, Romania and Sweden signed the letter.
According to a report by Bloomberg, the EU's lending arm is in talks with EU executives and other stakeholders to start investing in military companies that produce defense products.
In their letter, the leaders said the new EIB policy could have a “signaling effect” that would further encourage private investment and make this type of lending more acceptable to financial markets and banks.
“However, as it currently stands, EIB security and defense financing is limited to dual-use projects,” the letter said. “While the EIB's Strategic European Security Initiative and the recent EIF Defense Equity Fund are welcome initiatives, they represent only a small part of the EIB's current activities.”
–With assistance from Zoe Schneweiss.
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