EU States Urge Bloc's Lender to Up Financing for Defence

Over half of the EU's 27 countries, including powerhouses Germany and France, have called for the bloc's lending arm to bolster financing for Europe's defence industry in the face of Russia's war on Ukraine.

The European Union is scrambling to boost arms production as it struggles to keep weaponry and ammunition flowing to Kyiv and refill its own stocks.

In a letter to the head of the European Investment Bank (EIB) dated Sunday, 14 member states called on the lender to expand its investments in the sector beyond a small number of "dual-use products" that can have both military and civilian functions.

"The EU defence industry is a vital part of the European security. A credible defence industry in turn requires investments," said the letter signed by Bulgaria, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, the Netherlands, Poland, Romania and Sweden.

"This is why we must urgently discuss ways to enable further investment by the EIB in the security and defence sector."

According to long-standing policies, the EIB cannot directly invest in the manufacture of weaponry and ammunition, and the dual-use goods it finances must have a primarily civilian purpose.

"We need to explore different possibilities that would enable the EIB to invest in defence related activities beyond existing dual-use projects," the letter from the member states said.

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"This would mean discussing and re-evaluating current definitions of dual-use projects and the list of excluded activities."

The issue is set to feature at a summit of EU leaders in Brussels later this week focused on bolstering Europe's defence industry and supporting Ukraine.

Brussels has launched a raft of initiatives aimed at pumping more money into ramping up defence output.

But the bloc has still fallen well short of a promise made last year to send Kyiv a million artillery shells by this month.