European Union finance ministers started talks on Saturday over a joint defence fund that would buy and own defence equipment and charge members a fee for its use, as a way to spend more on defence without burdening national accounts with more debt.
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The fund, called the European Defence Mechanism, was proposed by the Bruegel think tank in a paper for the ministerial discussions as a way of addressing concerns about how highly-indebted countries could pay for costly military equipment.
It 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 United States for their security.
“It’s a good starting point for discussion,” Portuguese Finance Minister Joaquim Miranda Sarmento said.
Several other EU countries also expressed initial support, noting that setting up such a fund could be technically relatively simple because it would be based on the model of the euro zone bailout fund, the European Stability Mechanism.
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“We’ll still have several issues in terms of the mandate, the finance, the contributions, the leverage in the market. There are several issues on the financing, but also on the military aspect,” Sarmento said.
The EU is already looking to boost military spending by 800 billion euros (US$876 billion) over the next four years by loosening its fiscal rules on defence investment and jointly borrowing for large defence projects against the EU budget.