On Thursday, Polish Foreign Minister Radoslaw Sikorski expressed his country's support for creating a "rearmament" bank in Europe to fund the necessary defense investments following Russia's invasion of Ukraine. Sikorski favored this idea over alternatives, such as increasing national contributions to the EU budget, repurposing current contributions, utilizing unused EU funds, or issuing joint debt.
The European Commission has assessed that the EU requires 500 billion euros over a decade for defense financing. European countries bordering Russia are urging immediate action to strengthen defenses.
Poland, a key player in EU talks on joint defense financing, holds the EU presidency until June, giving it leverage in pushing forward certain proposals.
Sikorski mentioned a new proposal for a rearmament bank put forward in mid-January by Britain's former defense chief General Nick Carter, former EBRD Executive Committee member Guy de Selliers, and Senior Adviser at the Center for European Policy Analysis in Washington, Edward Lucas.
This bank would be open to non-EU countries like Britain, Norway, Japan, and the United States, with neutral EU nations like Austria, Ireland, Malta, and Cyprus having the opportunity to opt out to prevent opposition from Hungary, which leans towards Russia.
Sikorski noted that the bank could involve not only EU member states but also other like-minded nations. The initial capital input could be 100 billion euros, with 10% paid upfront and the remainder callable. It would be able to borrow the remainder in the capital markets with a triple A rating, providing 100 billion euros in lending power without significantly impacting member countries' borrowing capacity.
During informal discussions in Brussels on Monday, EU leaders agreed that the 27-member bloc should allocate more funds to military spending.