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EU lender to expand defence financing

AFP . Brussels
12 Apr 2024 21:15:55 | Update: 12 Apr 2024 21:15:55
EU lender to expand defence financing
Military carrying European Union flag — AFP File Photo

The EU's financing body said Friday it would open up lending to more technologies that can be used by militaries as Europe pushes to rearm in the face of Russia's war on Ukraine.

The European Union has been clambering to produce more weapons in a bid to continue the flow of arms and ammunition to Kyiv and keep Europe's stocks in good health.

At a summit last month, the EU's 27 leaders asked the European Investment Bank (EIB) to increase its scope to finance goods that can be used for defence out of a 6-billion-euro ($6.4 billion) fund.

According to long-established policies, the Luxembourg-based bank cannot directly fund the production of arms and ammunition, and the dual-use goods it finances must have a primarily civilian purpose.

"We will step up and accelerate our support for Europe's security and defence industry while safeguarding our financing capacity and highest environmental, social and governance standards," EIB chief Nadia Calvino said.

Officials said the revised rules will loosen the demand that any financing must go to primarily civilian technology.

The EIB has faced mounting pressure to finance more defence projects from the EU industry and more hawkish member states are worried about the threat from Moscow.

But even with this latest tweak in policy, the EU is still lagging far behind Russia, which has massively ramped up its output of weaponry by putting its economy on a war footing.