EU calls for investment in defence sector by European Investment Bank

Currently, expenditures on ammunition and military equipment are excluded from the list of actions that can be financed by the European Investment Bank (EIB). At the same time, the bank funds space technologies, cybersecurity projects, dual-use technologies, or critical infrastructure, such as border protection. The owners of the EIB are the 27 EU member states, and they decide which sectors the institution grants loans to.

"The Commission is calling on the governing bodies of the EIB Group to adjust the defence-related exclusions from the EIB Group's credit policy. This would allow the EIB to support the production of military equipment and, more broadly, the European defence industry," – stated the European Commission.

As part of the published strategy, the Commission wants the EU to increase production in its defence sector due to Russia's full-scale invasion of Ukraine in 2022.

"Modifying the credit policy, particularly the EIB Group's policy, is therefore necessary and a key priority to ensure the defence sector has access to EU financial instruments and the ability to fully utilize them," – indicated.

In a recent interview with PAP, EIB President Nadia Calvino assessed that the EU needs to strengthen the European defence industry, and the bank has another £5 billion for this purpose (approximately converted from $6.4 billion). She added that the process of investing these funds will be accelerated.

Members of the European Parliament, in the resolution adopted last Thursday concerning the EIB, emphasized that the war of Russia against Ukraine requires the EU "to increase its defensive readiness, and consequently - sufficient investments" and called on the bank to reform its eligibility list, "so that ammunition and military equipment (...) are no longer excluded from financing by the EIB".

The issue was also addressed during a debate on defence in Strasbourg by European Commission President Ursula von der Leyen. As she said, a "new European way of thinking in the field of defence is needed from institutions, industry, and investors". – "That's why I was very encouraged by President Calvino's words that the EIB is ready to do more to contribute to joint projects that will strengthen the European defence industry. I urge member states to support this proposal. The defence industry in Europe needs access to capital," – she highlighted.

The European Investment Bank is a financial institution of the European Union, owned by its member states. The EIB finances investments that contribute to the achievement of EU policy objectives.

In 2023, the EIB Group signed agreements for more than 900 projects worth £71 billion in total (approximately converted from $94 billion). These commitments are expected to trigger investments worth about £260 billion (converted from $342 billion), supporting 400,000 companies and 5.4 million jobs.

About half of the EIB's financing within the European Union is directed at cohesion policy regions, where the per capita income is the lowest.