New pact strengthens EU defence industry funding initiatives

The European Union is enhancing its military-industrial capabilities with a new agreement between the European Investment Bank (EIB) and the European Defence Agency (EDA), finalized on October 2.

This updated partnership aims to bolster investments in the EU's collective defence capabilities by providing the EIB with industry insights from the EDA, Caliber.Az reports citing foreign media.

Historically focused on civilian projects, the EIB has gradually relaxed its lending restrictions to accommodate military initiatives, particularly in response to the war in Ukraine. The latest memorandum builds on a 2018 agreement, reflecting a shift towards integrating defence outcomes into EU policies following Russia’s invasion.

Jiří Šedivý, chief executive of the EDA, stated that the EIB Group is committed to advancing the objectives laid out in the Defence Action Plan, which includes scaling up the defence industry. Collaboration with the EDA will better inform the EIB about defence sector needs, reinforcing their shared mission to enhance European security.

In light of increased military funding by European governments since the Ukraine conflict, the EU is becoming more assertive in defence matters—traditionally the domain of national governments and NATO. This year, the EU will appoint its first dedicated defence commissioner, expected to coordinate joint procurement and promote military integration, signalling a notable shift in policy across the continent.

Additionally, there are calls for the EU to take a more active role in defence procurement and funding, which aligns with the EIB's goal to allocate €8 billion ($8.8 billion) through its Strategic European Security Initiative by 2027. The bank has already disbursed €2 billion ($2.15 billion) in the initiative’s first two years.