By Jan Strupczewski
BRUSSELS (Reuters) – The European Investment Bank, the bank of EU governments, said it would lift existing limits on financing for defence projects and broaden the scope of what is eligible, although a ban on financing weapons and ammunition would remain.
In a letter to European Union leaders ahead of a defence summit on Thursday, EIB head Nadia Calvino said the EIB measures would be part of a wider EU push to boost defence financing as the 27-nation bloc seeks to deter any future Russian attack.
“We intend to propose at the upcoming March meeting of the EIB Board of Directors a further adjustment of the Group’s eligibility criteria, to ensure that excluded activities are more precisely defined and as limited as possible,” Calvino said in the letter, seen by Reuters.
“Furthermore, we intend to propose a revision of our operational framework … with an ambitious financial and capital allocation to be determined annually,” the letter said.
“This will enable the EIB Group to increase the volume of available funding to respond to the needs, while safeguarding its financial position and effective financing of the Union’s other strategic priorities.”
The EIB, with a balance sheet total of 600 billion euros ($633 billion), was earlier planning to double its financing for defence projects to 2 billion euros in 2025, with a top limit of 8 billion euros by 2027.
With the new approach, the EIB will be able to lend for large-scale strategic projects like land border protection, military mobility, critical infrastructures, de-mining and de-contamination, space, cybersecurity, anti-jamming technologies, military equipment and facilities, drones, bio-hazard and seabed infrastructure protection, critical raw materials, and research.
The change means defence and security will become part of the bank’s core public policy goals, alongside cohesion and sustainability, according to EU officials.
“So the EIB can finance helicopters, barracks, radars, and other things that are without plausible civilian use, but the bank will still not lend for weapons and ammunition,” one EU official said.
Officials said the new EIB approach was also a signal to investors and other banks that security and defence were public goods worth supporting, and not in the same category as excluded activities like gambling, or tobacco or pornography – a “signalling effect” many EU governments were keen on.
($1 = 0.9480 euros)
(Reporting by Jan Strupczewski; editing by Mark Heinrich)
