Mark Rutte, NATO general secretary, said it clearly last December to Europeans: «They say their banks and pension funds that it is simply unacceptable to refuse to invest in the defense industry. The defense is not … in the same category as illicit drugs and pornography ». There is the problem, both the green pact (sustainability) and the notions of soft (reputational) power legitimized by Brussels have created a problem for the current time: private capital for the military industry is penalized and both investors and banks flee from it.
In the White Defense Paper released by Brussels last week there are only two mentions to this matter. One to say that a dialogue with the sector will begin immediately to “eliminate obstacles related to access to financing, including ESG investment (environmental, social and governance)” and another to affirm that the regulation on sustainable finances (SFDR) “does not prevent the defense sector”, but that “additional clarifications” on the application of this regulation will be made. Although of Tapadillo, the above means that, indeed, European regulation has had a significant impact on defense investment.
There are restrictions to finance companies that manufacture “controversial weapons” by the UN (antipersonnel mines, blinding laser weapons, cluster ammunition). These firms cannot be included in market reference indices and are excluded from the EU taxonomy. Result, when a fund manager or a banker receives an application, it is easier to mark the box and discard them to avoid problems. The energy defense and transition (ecological, say others) have been conceived as exclusive by the EU. Result: At the end of 2023, 74% of all assets of climate transition funds worldwide (155,000 million dollars) followed a climate reference index of the EU and, therefore, could not invest in companies involved in the manufacture of weapons, according to a report by the ‘Think Tank’ Bruegel.
There are also reputational issues. Of the 27 EU banks that currently appear in the Euro Stoxx Banks Index index, all except three have policies that prohibit them to finance companies involved in controversial or nuclear weapons. Although the EU regulations do not demand it, also many investment entities and funds apply strict self -imposed restrictions on investment in defense companies. These limitations go beyond the nominalism of those who want to make the climate spending pass as a military.
Final coda: Failure to comply with its constitutional duty, the Government avoids presenting a budget project before Congress. Spain today is governed with the accounts that approved a Parliament that does not exist (the XIV Legislature, 2019-2023). [email protected]
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