EU Leaders Consider Joint Borrowing to Boost Defence Spending Amid Growing Security Concerns.

In a recent development, Belgian Prime Minister Alexander De Croo has voiced support for the idea of joint European Union borrowing to fund increased defence spending, a proposal gaining momentum among European leaders in response to heightened security challenges. The suggestion comes as Europe grapples with the implications of Russia's aggression in Ukraine and questions over the United States' commitment to NATO's security guarantees.
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Meeting of NATO Ministers of Defence - Brussels. (Picture source NATO)

The concept of issuing special EU bonds for defence investments has been discussed by prominent figures, including Estonian Prime Minister Kaja Kallas, French President Emmanuel Macron, and European Council President Charles Michel. This financial strategy aims to expedite defence upgrades across the continent, although it requires careful consideration of long-term sustainability beyond initial borrowing.

Despite the innovative approach, the proposal is in the early discussion phase and faces skepticism from countries traditionally cautious about EU-wide financial commitments. However, the successful precedent of joint borrowing during the COVID-19 pandemic provides a foundation for optimism about the feasibility of this initiative.

EU industrial chief Thierry Breton has also proposed a significant step towards bolstering Europe's defence capabilities with the idea of a 100 billion euro European Defence Fund, pending the approval of the next European Commission.

As NATO anticipates a $33 billion increase in European defence spending this year, the pressure is on for EU members to meet the alliance's spending targets. Belgium, currently lagging with a projected defence spending of 1.13% of GDP, is under particular scrutiny. Prime Minister De Croo has pledged to accelerate efforts to meet the 2% GDP target well before the current 2035 projection.

The call for enhanced EU cooperation in arms production and a more flexible approach to military integration highlights the broader push towards a more unified and robust European defence posture. As the continent faces evolving security threats, the discussions at the Munich Security Conference and beyond signal a critical juncture in Europe's collective defence strategy.

Defense News February 2024