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Luxembourg and Canada lead initiative to establish multilateral defense bank for NATO allies

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Governments facing strained public finances could request funding from a planned multilateral defense bank spearheaded by Luxembourg and Canada, according to Luxembourg Prime Minister Luc Frieden.

The proposed institution aims to mobilize both public and private capital for defense investments.

Speaking to Euractiv, Frieden said the institution would operate as a multilateral lending facility open to NATO members and partner countries, providing financing to sovereign states, defense companies, and commercial banks.

Proponents of the initiative state that the institution will complement existing financing tools as allies scale up military spending over the next decade.

Speaking to Euractiv during the NATO summit, Frieden noted that the initiative is still in the development phase but has already attracted interest from a core group of participating nations.

“We currently have a group of about ten countries, including some large nations. This is a work in progress, so we are not officially launching it at this summit. We are laying the groundwork here,” the Prime Minister said.

Frieden indicated that participating nations have already completed preliminary work, including drafting the bank’s charter and governance rules, and will continue to engage other NATO allies and partners before officially launching the institution.

When asked whether countries facing budget constraints, such as Italy or Greece, could apply to the bank for defense financing, Frieden responded, “Of course.”

Frieden argued that as NATO members increase defense spending over the next ten years, the bank would help address the funding gaps governments face:

“For geopolitical reasons, we have decided that we need to spend more on defense. Various NATO member states do not have sufficient fiscal space to finance all the additional defense spending we want to undertake over the next decade.”

According to Frieden, the institution will play a complementary role rather than replacing existing funding sources.

In addition to lending to sovereign states, it could finance defense firms, including small and medium-sized enterprises, and provide financial guarantees to commercial banks to support lending to the defense sector.

The Luxembourg prime minister also compared the initiative to the EU’s Security Action for Europe (SAFE) instrument, arguing that SAFE’s eligibility rules are more restrictive.

Asked whether countries wishing to procure defense equipment on their own rather than through joint procurement programs would be more likely to apply to the proposed bank, Frieden replied, “Exactly.”

Europe

Jordan Bardella faces antisemitism accusations over past messages

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Jordan Bardella, president of France’s National Rally (RN), has been accused of voicing antisemitic views in private conversations with party members when he was 17 years old.

In a report published on Monday, investigative news website Mediapart stated that it had obtained and independently verified correspondence in which Bardella allegedly said that “Jews must dominate other peoples, crush them, and rob them,” and that “all banks are in the hands of Jews.”

Bardella strongly denied the allegations, adding that he will sue Mediapart.

Both Bardella and Marine Le Pen characterised the report as part of a wider, coordinated effort to prevent the veteran far-right politician, who currently leads in the polls, from winning next year’s election.

Bardella said:

“At a time when we have never been closer to the victory of our ideas, certain activist media outlets are ready to organise smear campaigns to destabilise the presidential campaign and attack my honour.”

The RN president said, “We can feel the first signs of an all-out war and attempts to destabilise the presidential campaign.”

Le Pen, seated beside Bardella as she spoke to reporters in the National Assembly, the lower house of the French parliament, said, “The system will do everything, even the most disgusting things, to block this momentum.”

During her attendance at a construction industry event on Monday, Le Pen described Mediapart’s report as “madness”.

The National Rally’s predecessor, the National Front, was founded by Le Pen’s father, Jean-Marie, who was convicted repeatedly of hate speech, along with Nazi collaborators.

Le Pen expelled her father from the party in 2015 after he repeated his claim that the Holocaust was a “detail” of history.

Given that Le Pen propelled Bardella’s career and placed him at the forefront of efforts to clean up the party’s image, the fallout from this latest scandal could be particularly damaging.

Too young to be associated with the party’s old guard, Bardella was seen as a fresh face who could help the party make inroads among sections of the electorate where the Le Pen name carried too many negative connotations, particularly among older voters and the Jewish community.

Since taking the helm of the National Rally in 2021, Bardella has promoted the party as a defender of France’s Jewish population, pointing to his unreserved support for Israel as evidence.

The 31-year-old Bardella travelled to Israel in 2025 after receiving an invitation from Israeli Minister of Diaspora Affairs Amichai Chikli.

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EU pays extra €100bn for energy without securing more oil or gas

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The European Union paid an additional bill of more than €100 billion during the year due to volatility in global energy markets. Despite this heavy expenditure, no increase was achieved in the volume of oil and gas supplied to the bloc.

Assessing the situation ahead of the EU Energy Ministers Meeting held in Dublin, EU Commissioner for Energy Dan Jørgensen emphasised that external dependency has reached an unsustainable point.

In his statement on 29 September, Jørgensen said: “The extra amount we paid for energy this year exceeded 100 billion euros, yet in return we did not receive a single drop more oil or a single cubic metre more gas.”

Pointing out that every rise in global prices is directly reflected on European households and industry, Jørgensen argued that the solution lies in domestic resources.

“Instead of imported, polluting, and expensive fossil fuels, we must turn to our own generated energy, to green electricity,” the commissioner said.

Energy prices in Europe surged once again due to the war with Iran, escalating concerns over navigation security in the Strait of Hormuz, and turmoil across global oil markets.

Following a new wave of attacks directed at Iran by the Washington administration, European benchmark natural gas prices in early September reached their highest level since January 2023.

Dutch gas futures rose by 5.9% to €73.95 per megawatt-hour.

This market pricing was driven by concerns ahead of the winter period that liquefied natural gas (LNG) shipments routed through the Strait of Hormuz could face prolonged disruptions.

Another development rattling the continent’s energy balances was the signals emanating from the White House. The possibility raised by US President Donald Trump of curbing diesel exports heightened anxiety in Brussels.

The EU, which meets approximately half of its diesel needs from the US, does not want this supply line severed.

Jørgensen reported that he conveyed clearly to Washington that such a step would serve the interests of neither the US nor Europe.

The EU official described US Energy Secretary Chris Wright’s distance from the export restrictions in question as a positive approach.

Stating that Europe is not currently experiencing a physical supply crisis, Jørgensen noted that they aim to minimise uncertainties as the winter season approaches.

Having turned to alternative suppliers and LNG markets to reduce its reliance on Russian resources since the outbreak of the Russia-Ukraine war, the EU continues to face high cost pressures.

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Merz and five EU allies threaten veto over seven-year budget cuts

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German Chancellor Friedrich Merz and the leaders of five other countries have threatened to withhold approval for the draft seven-year EU budget unless billions of euros in cuts are made as they demand.

According to the Financial Times, Merz, along with the leaders of the Netherlands, Sweden, Denmark, Austria, and Finland, signed a letter making clear that the proposed budget must be cut by billions of euros, or they will block it.

The 2028-2034 budget was prepared last year by the European Commission and requires the approval of all EU countries.

The proposed budget has been set at approximately 2 trillion euros ($2.33 trillion), and the parties involved hope to reach an agreement by the end of 2026.

The proposed sum is significantly higher than the current budget, which runs from 2021 to 2027.

Merz stated earlier this month that cuts should be implemented across all policy areas, rejecting further recourse to joint EU borrowing to plug the shortfall.

“Excessive debt threatens our sovereignty and our capacity to act,” the chancellor said, adding that governments face the “undoubtedly painful task” of setting priorities.

Arguing that a “20th-century budget” cannot resolve current challenges, the German leader called for spending in the bloc’s next budget to be shifted towards competitiveness and defence.

The EU budget is financed primarily through member state contributions. These payments are calculated either as national contributions based on gross national product or as a % linked to national VAT revenues.

As the EU’s largest economy, Germany provides the largest contribution in absolute terms.

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