said<\/a><\/span> 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.<\/p>\nProponents of the initiative state that the institution will complement existing financing tools as allies scale up military spending over the next decade.<\/p>\n
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.<\/p>\n
“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.<\/p>\n
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.<\/p>\n
When asked whether countries facing budget constraints, such as Italy or Greece, could apply to the bank for defense financing, Frieden responded, “Of course.”<\/p>\n
Frieden argued that as NATO members increase defense spending over the next ten years, the bank would help address the funding gaps governments face:<\/p>\n
“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.”<\/p>\n
According to Frieden, the institution will play a complementary role rather than replacing existing funding sources.<\/p>\n
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.<\/p>\n
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.<\/p>\n
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.”<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
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 […]<\/p>\n","protected":false},"author":1,"featured_media":15653,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[3],"tags":[742,20200,18290,5042,10251,891,20201,579,841,20203,20196,9824,6701,20199,207,20197,20202,20198],"class_list":["post-15652","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-europe","tag-canada","tag-commercial-banks","tag-defense-bank","tag-defense-industry","tag-defense-procurement","tag-europe","tag-financial-guarantees","tag-greece","tag-italy","tag-joint-procurement","tag-luc-frieden","tag-luxembourg","tag-military-spending","tag-multilateral-lending","tag-nato","tag-public-finance","tag-security-funding","tag-sovereign-lending"],"yoast_head":"\n
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