EU Ministers Positive on Joint Fund for Spending on Defence Equipment

European Union finance ministers expressed interest on April 12 in the idea of a joint defence fund that would buy and own defence equipment, but some also said the EU should first look at existing financing options before creating new ones.

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The discussion is part of a broader European effort to prepare for a potential attack from Russia as EU governments realise they can no longer fully rely on the US for their security.

The ministers were discussing an idea proposed by the Bruegel think-tank that a group of EU and non-EU countries could set up an intergovernmental fund, with paid-in capital, that would borrow on the market, and jointly buy and own expensive military gear.

The participation of non-EU countries is important to many in the grouping because it would allow for the involvement of defence powerhouse Britain, as well as Norway, Canada or Ukraine.

The fund, called the European Defence Mechanism (EDM), would be a way of addressing concerns of highly indebted countries, because the debt incurred to pay for the equipment would be on the EDM's books, rather than on national accounts.

"Most ministers were interested in the Bruegel paper," said Polish Finance Minister Andrzej Domanski, who chaired the talks.