Meeting on Saturday 12 April at the Polish Army Museum in Warsaw for a second day of informal discussions (see EUROPE 13620/2), European finance ministers explored several avenues for joint financing of defence equipment purchases.
Discussions were fuelled by the presentation of a study by the independent Brussels think tank Bruegel, which recommends establishing a European Defence Mechanism (EDM) (see EUROPE B1361623).
“Most of the ministers were interested in the Bruegel paper”, reported the Presidency of the EU Council, with Poland seeking to stimulate debate on the proposal.
“Most of the ministers shared the view that additional tools, additional steps, could be needed”, Polish minister Andrzej Domański stressed at a press conference on Saturday.
The EDM would enable willing EU Member States, as well as third country partners such as the UK, Norway and Ukraine, to jointly raise funds on the capital markets to acquire military equipment.
Asked about this approach, European Commissioner for Economy and Productivity Valdis Dombrovskis acknowledged the value of the “coalition of the willing” principle, which would make it possible to avoid the unanimity requirement inherent in decisions relating to the European budget. He also questioned the role that the European Commission could play within an intergovernmental structure open to third countries.
“That would require separate discussions, but certainly it helps to achieve certain objectives, like the possibility to engage with other like-minded partners outside the EU”, he said.
West-East solidarity. “The defence of Europe has to be holistic, considering all the border. We are all committed to a European public good that is defence”, stressed the Portuguese minister, Joaquim Miranda Sarmento, expressing his solidarity with the countries most directly exposed to the Russian threat.
“This is the moment for European solidarity…to support Ukraine and frontline Eastern nations”, his Spanish counterpart, Carlos Cuerpo, told the EFE agency.
Among the ideas put forward on Saturday, Spain suggested a new “transitional” defence fund, combining grants and loans. It would be financed by voluntary contributions, EU funding, the issue of joint debt and income from frozen Russian assets.
Valdis Dombrovskis indicated the European Commission’s “openness” to these various financing projects, including those conceived outside the EU’s institutional framework.
Priority to ‘ReArm Europe’. The ‘ReArm Europe’ plan (see EUROPE 13592/1) remains the EU Member States’ top priority.
Three of the plan’s tools were on the ministers’ table: activation of the Stability and Growth Pact’s national safeguard clause; the ‘SAFE’ loan instrument for €150 billion (see EUROPE 13619/14); and directing private financing towards the defence sector, in particular with the EIB’s increased involvement.
A “large majority” of EU countries are considering activating the national safeguard clause, said Mr Dombrovskis.
The Commission, which wants to proceed in a “coordinated and synchronised” manner, has invited Member States to submit their requests to activate this clause by the end of April.
“The Commission stands ready to swiftly assess the requests received and adopt recommendations in June, for adoption by the Council in July”, declared Mr Dombrovskis. (Original version in French by Bernard Denuit)