Spain and another 18 countries in the European Union (EU) have urged the European Investment Bank (BEI) to continue adjusting their mandate to finance more security and defense projects and explore the possibility of issuing debt, before the “crucial” need to reinforce the community military base.
“The BEI must continue to explore new routes to play an even more prominent role in investment financing and the leverage of private financing for the security and defense sector,” these countries indicated through a joint letter released this Friday.
The letter has been signed by the president of the Spanish Government, Pedro Sánchez, and the leaders of Finland, Belgium, Croatia, Chipre, Czech, Denmark, Estonia, France, Greece, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Romania , Slovakia and Sweden.
The BEI already eliminated last May one of its main obstacles to invest in defense by suppressing the requirement that required that to finance a dual -use technology -civil and military, the only ones that the institution can finance- the project in question obtained more from the 50% of its future income from the civil use of the same.
This decision allowed slightly raising the financing of military projects, which became 1,000 million in 2024, double that the previous year for such projects. Calviño’s intention is to double throughout this year. However, it is an insufficient figure for the vast majority of European governments, which are the shareholders of the BEI.
The president has been reluctant to expand the mandate that the BEI has to finance armament. “We are not a Ministry of Defense, we are the European Investment Bank,” he replied at a press conference in Brussels this Thursday in which he presented the annual report of the entity.
In fact, he said that the BEI “has adopted a very proactive and ambitious position to increase its support to the European security and defense industry, safeguarding its financial capacity.”
The 19 EU countries of the letter now insist that the bank re -evaluate the list of activities and sectors that are excluded from their financing.
Specifically, they ask that “with greater precision” be defined “the terminology and content of the excluded activities and have” a scope as limited as possible to adjust to the new political priorities of the EU. ”
They also insist on adjusting the loan policy to increase the volume of financing available in the field of security and defense
“This greater emphasis on security and defense, for example by increasing the volume of available investment of the European Security Strategic Initiative, should preserve the effective financing of the other strategic priorities of the BEI,” they said.
Finally, they urge that the BEI contemplates the issuance of debt to finance security and defense projects, which in his opinion “could increase transparency and provide clarity and the possibility of choice for investors.”
However, they believe that this should be considered in consultation with financial markets and qualification agencies regarding the viability of this possibility, in order to guarantee “the most effective and profitable financing possible” for this type of projects and paying attention ” to the possible impact on the financing costs of the current bonds of the BEI ”.
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