The European Union (EU) finance ministers are meeting today to discuss funding for the community’s defense initiatives and a report from the economic think tank Bruegel, which was commissioned by the Polish presidency of the Council. This report suggests the establishment of a common European mechanism, akin to the eurozone’s rescue fund following the previous financial crisis, but this time focusing on security.
At the informal Ecofin meeting in Warsaw, Portuguese Finance Minister Joaquim Miranda Sarmento remarked, “This Bruegel proposal is an interesting starting point for discussion.”
“Europe, throughout its various crises, has managed to combine existing instruments with new ones. […] There are numerous open aspects, many of which naturally spark discussion and some antagonism among member states, but it is a good starting point, which is why the European Commission scheduled this discussion for today,” he added.
Held in Warsaw under the Polish presidency of the EU Council, the informal Ecofin meeting—comprising the EU’s finance ministers—aims to explore ways to enhance investment opportunities and finance Europe’s defense and security amid geopolitical tensions.
The meeting will also analyze the proposal for a new European Defense Mechanism, an intergovernmental institution similar to the European Stability Mechanism, intended for financial assistance. This new mechanism would aim to create a single market for the industry, finance large-scale projects, and include non-EU partners like the United Kingdom.
Portugal sees several positives in the proposal, including “joint procurement, large-scale project initiatives, member state cooperation, and funding that would allow market access, […] leveraging this funding into superior resources.”
“There are several positive aspects, but also others, more of a military nature, that raise legitimate concerns among member states,” Joaquim Miranda Sarmento indicated.
Several countries, led by Germany, have already rejected this idea, notably due to the inclusion of non-EU countries and reliance on new common debt issuance, according to community sources.
Bruegel has estimated that the EU may need to spend 250 billion euros annually, equivalent to 3.5% of its Gross Domestic Product (GDP), to ensure its security in light of the Ukraine war prompted by Russia’s invasion.
