In a concerted effort to bolster European defence capabilities in light of escalating tensions with Russia, nineteen EU countries, including France and Germany, have called on the European Investment Bank (EIB) to enhance its lending for the defence sector. This initiative comes as concerns grow over a potential Russian attack, prompting the nations to send a joint letter ahead of EU leaders' discussions on January 31, 2025 [b346fede].
Currently, the EIB is restricted from financing ammunition or weapons production, necessitating majority government approval for any changes to this policy. Finland, which shares a 1,340-kilometer border with Russia and became a NATO member in 2023, has been particularly vocal about the need for EIB funding to support ammunition production [b346fede].
In response to these growing demands, the EIB has announced plans to increase its financing for security projects from €1 billion in 2024 to €2 billion in 2025. This move is part of a broader strategy to address the estimated €500 billion funding gap in the EU defence sector over the next decade [b346fede].
This push for increased defence funding aligns with the European Commission's recent allocation of €170 million to enhance border security in Eastern Europe, aimed at countering threats from Russia and Belarus. The funding will be distributed among several countries, including Estonia, Finland, Latvia, Lithuania, Poland, and Norway, as they face a surge in irregular arrivals at their borders [e0c1c5f9].
As the EU grapples with these multifaceted security challenges, the calls for increased defence funding reflect a growing recognition of the need for a robust and unified response to external threats, particularly from Russia [b346fede].