"Following your mandate to strengthen support for Europe's security and defence industry while preserving the EIB's financing capacity, the group has significantly adapted its policies in this area since 1 January 2024," European Investment Bank president Nadia Calvino worte in a letter sent to European heads of state and government on Tuesday. "The eligibility rules have been considerably extended so that the EIB Group can now finance projects with a primary defence objective as well as a broader security angle, including land border protection, military mobility, critical infrastructure, demining and decontamination, space, cybersecurity, anti-jamming technologies, military equipment and facilities, drones, protection of infrastructure against biological and underwater risks, critical raw materials and research."
"Agreements have been signed with the Nato Innovation Fund and the European Defence Agency to help identify and evaluate suitable projects," she wrote. "A new Defence Capital Fund has been launched for capital investment in SMEs and startups in the defence and security sectors. A dedicated one-stop shop has been set up to provide efficient and agile support for project proposals, and a roadshow has been launched across member states to raise industry awareness of funding opportunities, identify market gaps and government priorities, and seek investment and projects across the EU."
It was break from a relative dogmatic neutrality necessitated by the new world order designed by the new US President, Donald Trump, especially after his humiliation of the Ukrainian president Volodymyr Zelensky.
"The operational plan for 2025 foresees a further doubling of annual investment to a record €2bn, based on a strong pipeline of 14 projects currently under evaluation across Europe, including in the areas of drones, space, cyber security, quantum technologies, military installations and civil protection,” stated Calvino. “One of the flagship projects currently being evaluated is the large-scale investment in a military camp for a Bundeswehr brigade in Lithuania, close to the Belarusian border.”
"We intend to propose a revision of our operational framework and the replacement of the ad hoc European Strategic Security Initiative by a cross-cutting public policy objective dedicated to contributing to peace and security in Europe, with an ambitious financial and capital allocation to be determined annually in the Group's operational plan", the letter reads. This should "increase the volume of financing available to meet needs, while preserving its financial position and the effective financing of the [European] Union's other strategic priorities, including the Green Pact, critical raw materials, clean industry, cohesion and innovation".
A very short-term meeting of the European National Promotion Banks is also on the radar to put some oil in the wheels of European funding.
"In these difficult times, it is imperative to strengthen Europe's defence industrial capabilities, and this requires investment in R&D, innovation and new technologies to counter the hybrid threats we face, whether in space, using artificial intelligence or protecting our critical infrastructures in the field of energy, communications and utilities, and promoting synergies between civilian and military industries", so-called dual use technologies.
Earlier in the day, the president of the European Commission, Ursula von der Leyen, had announced a €800bn strategy for European defence, including a €150bn loan component provided by the EIB, a figure that does not appear in this letter. The difference is dramatic. According to a recent study by the Robert Schuman Foundation, "the European Defence Fund brings military spending into the European budget, initially with €8bn over 2021-2027, increased by €1.5bn after the revision of the MFF in 2024. It takes the form of subsidies for cooperative programmes. Grants are paid to entities (companies or organisations involved in defence, research laboratories, etc.). It provides co-financing (often 80% or even 100%). One third of the budget is allocated to research support and two thirds to development support. The average level budgeted since the creation of the EDF has been just under a billion euros a year, but the allocation should increase by the end of the programme: €1.4bn budgeted in 2025".
In June 2024, von der Leyen estimated that the European Union would need €500bn of investment in the defence sector over the decade.
Read the original French-language version of this news report /