At the extraordinary EU summit on Feb. 3 at the Château de Limont near Liège, there is a threat of a dispute over defense policy. There are differences of opinion among the heads of state and government on the financing of possible future armaments projects – but also on the question of what capacities the EU wants to develop together and what form governance should take. This emerges from a diplomatic wire report that Table.Briefings was able to view.
The differences have existed for some time. German Chancellor Olaf Scholz has repeatedly emphasized that the member states alone are responsible for defense. The EU could help with research and development, but was not there to finance armaments, he said at the EU summit last June.
Scholz is apparently not alone in this stance. According to the report from the Permanent Representatives Committee in Brussels, financing will be "the most difficult issue" at the meeting of the heads of state and government at the beginning of February.
Accordingly, Italy in particular is in favor of joint financing of new armaments projects, as envisaged by the EU Commission. A larger group including Germany, France, the Netherlands, Sweden, Denmark and Finland, on the other hand, emphasizes the importance of national financing and the role of private investment. However, the Frugal camp has recently shown cracks. In December, Danish Prime Minister Mette Frederiksen hinted at a change of course and no longer wanted to rule out joint debt. She did not see how the necessary investments could be financed with traditional instruments.
In order to promote private investment, the role of the European Investment Bank (EIB), for example, should be expanded. EIB boss Nadia Calviño announced at the Ecofin meeting in Brussels on Tuesday that the financing of defense projects would be expanded. Last year, the development bank invested a record sum of one billion euros in security and defense, said Calviño. In the new year, it expects to double this amount. However, the EIB only supports dual-use products that can be used for both civilian and military purposes.
According to the report, only individual countries such as the Czech Republic and Romania are in favor of new, innovative sources of funding. Latvia and Finland warned to think "out of the box" in order to quickly tap into new sources of finance. This apparently refers to the issuing of new European debt (Eurobonds) to finance joint armaments projects, as discussed by EU Defense Commissioner Andrius Kubilius. Possible options under discussion include no longer discriminating against private investment in the arms industry in the taxonomy or using idle funds from the ESM euro rescue fund. Funds could also be reallocated in the next MFF.
However, Germany has so far rejected the option of new debt and is also critical of the use of the ESM, partly in view of the critical budget situation in France and Italy. CDU chancellor candidate Friedrich Merz also emphasized on Thursday that the structural deficits in the procurement of defence equipment in Europe must be tackled first. "And before we devote ourselves to simplification, standardization and scaling, I do not believe that new membership-financed funds or even joint debt are expedient."
Berlin also has reservations about the idea of having the acquisition of military capacities planned and implemented at EU level. According to the wire report, France also sees no European added value here. At best, it would be conceivable to upgrade the European Defense Agency (EDA). It could begin to think about joint capacities and coordination instruments.
Scholz met with French President Emmanuel Macron in Paris on Wednesday. They also coordinated their position for the special summit at the beginning of February. No decisions are expected at the informal meeting. The most important question is not which method will be used to finance European defense projects, said Polish Prime Minister Donald Tusk in the EU Parliament this week. What is more important is that there is no alternative, no choice: "We must be able to defend ourselves, which means that European money must be spent on this".
Council President António Costa wants to discuss which armaments projects the Europeans should tackle together and how these could be financed. According to diplomats, no decisions are expected on the question of financing, also in view of the German parliamentary elections. Costa intends to present his conclusions at the end of the meeting in Brussels. With Stephan, Israel, Wilhelmine Preußen
