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EU finance ministers to discuss creation of joint fund for defense equipment purchases

07 April 2025 15:13

European Union finance ministers are set to discuss a proposal this week for establishing a joint intergovernmental defence fund aimed at boosting Europe’s military readiness amid growing concerns over security threats from Russia and declining U.S. military support.

According to a paper prepared for the ministers' discussions—drafted by the Brussels-based Bruegel think tank and commissioned by Poland, which currently holds the rotating EU presidency—the proposed fund would allow member states to jointly buy and own defence equipment, Caliber.Az reports, citing Western media.

EU countries would pay a usage fee, providing a significant new source of defence financing without inflating national debt levels—an important consideration for high-debt states within the bloc.

The proposed fund, named the European Defence Mechanism (EDM), would operate under an intergovernmental treaty, equipped with both paid-in and callable capital to enable borrowing on financial markets. It would also have the capacity to issue loans and could include non-EU countries such as the United Kingdom, Ukraine, and Norway as participants.

This initiative comes amid a broader EU debate on military self-reliance, driven by fears that the bloc can no longer count on the United States as a reliable security guarantor. The EU has already announced plans to loosen fiscal rules to facilitate €800 billion ($876 billion) in defence investments over the next four years, including potential joint borrowing backed by the EU budget.

If approved, the EDM would complement these efforts by creating a shared European market for defence procurement, helping to reduce costs, enhance interoperability, and avoid duplication. Currently, Europe’s defence landscape is fragmented, with the EU operating at least seven types of tanks, nine different self-propelled howitzers, and seven varieties of infantry fighting vehicles—leading to inefficiencies and higher expenses.

The Bruegel paper recommends that the fund focus on “strategic enablers”—infrastructure and systems often provided by the United States, such as satellite-based communications, joint command systems, strategic air and maritime transport, advanced missile systems, nuclear deterrence capabilities, and fifth- or sixth-generation fighter jets.

The EDM will be discussed in detail during an informal meeting of EU finance ministers scheduled for Saturday in Warsaw. If endorsed, the plan could mark a major step toward Europe’s long-sought goal of strategic autonomy in defence.

By Khagan Isayev

Caliber.Az
Views: 143

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