A proposal to enhance European defence collaboration by raising €100 billion through the issuance of Eurobonds in financial markets is gaining momentum among EU finance ministers.
Vincent Van Peteghem (photo), the Finance Minister of Belgium, presently holding the presidency of the European Council, voiced his support for the concept of ‘common defence bonds’ on Wednesday.
“In the past days, the discussion on the common defence bonds has also gained attention, which I can only support,” Belgium’s finance minister Vincent van Peteghem told a conference in Brussels on Tuesday.
EU finance ministers and central bankers are due to meet on Friday and Saturday in Ghent, Belgium, at what is known as an “informal” meeting at which various financial ideas for Europe’s economy can be openly discussed.
Van Peteghem, who will chair that meeting, made his comments while discussing the agenda for the Belgian Ecofin meeting. Boosting Europe’s global competitiveness, capital markets union and financial literacy are also among the topics on the agenda.
First mentioned by Kaja Kallas
The idea for using eurobonds to boost European defences was first mentioed in December by Estonian Prime Minister Kaja Kallas. The idea has already been supported by French President Emmanuel Macron and European Council President Charles Michel but countries like the Netherlands and Germany are seen as more hesitant.
Addressing the World Economic Forum last month, Macron spoke about the need for another phase of reinvestments in Europe like during the Covid-19 pandemic.
Thierry Breton, the EU’s internal market commissioner, has said the union needs to be “ready to take risks” to boost defence production also through public co-financing that could include a 100 billion euro fund to boost cooperation in the EU defence industry.
Some EU member states, notably Germany and the Netherlands, are understood to be reluctant to accept Eurobonds in general. The Netherlands in recent years has repeatedly opposed issuing eurobonds as a way to soften the impact of coronavirus on the worst affected countries. Outgoing Dutch prime minister Mark Rutte, seen as the next secretary general of Nato, has told journalists at European Council meetings that eurobonds go “against the design of the” European Monetary Union, or EMU.
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