EIB triples support for defense - Bank to finance €3 billion to ensure EU security
The European Investment Bank has tripled a scheme to help finance the bloc's defense industry to 3 billion euros. The EU's lending arm has signed a deal with Germany's Deutsche Bank to start channeling money to the bloc's military firms.
The EIB announced that it will provide a €500 million loan to the German lender, which will then lend the money back to small and medium-sized firms across the EU supply chain.
It is the first time the European Investment Bank has offered so-called brokered financing for the defense sector and is expected to announce similar deals with banks in France and other parts of the bloc in the coming weeks.
The institution is prohibited from investing directly in weapons, but it has begun investing more broadly in the defense sector over the past year, as part of Europe's efforts to build security capabilities.
The Bank's President, Nadia Calviño, announced the plan at a summit in Brussels, saying that strengthening Europe's security and defense was now "central" to the institution's mission and would help address the "urgent need for investment" in the sector.
The threefold increase in lending, which was initially approved in December, reflected the "extremely strong" interest of commercial banks across Europe to get involved in strengthening protection, the EIB added in a statement.
This comes at a time when European countries are under great pressure from US President Donald Trump to increase their defense spending.
Germany unveiled its €500 billion plan for defense and infrastructure spending earlier this year, and many other countries are signaling similar plans.
Share prices of major European arms firms have risen, but many smaller firms remain constrained by a lack of financing. The chief executive of Deutsche Bank said this was affecting hundreds of smaller firms that supply essential parts. The bank has formed an internal group spanning a range of departments to work on defence finance.
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