Warsaw, Apr 12 (EFE).— Spain on Saturday proposed the creation of a new European financial instrument to fast-track large-scale defense projects, aiming to reduce EU reliance on US military support and respond swiftly to mounting security challenges.
The plan, presented during an informal meeting of EU finance ministers in Warsaw, would also allow non-EU countries to participate, aiming to boost European defense spending in the short term.
Spanish Economy Minister Carlos Cuerpo outlined the proposal as a way to strengthen the EU’s autonomy in defense, particularly in light of the United States’ shifting stance under President Donald Trump regarding Ukraine and NATO contributions.
“The proposal aims not only to increase defense spending immediately but also to use resources more efficiently by coordinating Europe’s security needs,” Cuerpo said.
He described the fund as a “transitional solution” to expedite defense investments until more permanent financing, such as incorporating defense into the EU’s long-term budget, is in place.
A Swift, Temporary Mechanism
The proposed instrument would take the form of a temporary special-purpose entity, open not only to EU member states.
It would be funded through voluntary contributions from participating countries, with the exact formula for contributions yet to be determined.
The fund would support grants and loans for large-scale defense projects, complementing other EU financing sources, such as common debt issuance under existing or new programs.
The Spanish Ministry of Economy also suggested tapping into the European Stability Mechanism, the eurozone’s rescue fund with €400 billion in lending capacity, and leveraging the windfall earnings from around €200 billion in frozen Russian assets held in the EU.
Spain argues that this new instrument could be established more quickly than long-term solutions like increasing the EU’s multi-annual financial framework, another proposal Madrid supports but acknowledges would take years to implement.
“This is the moment for European solidarity…to support Ukraine and frontline Eastern nations. We must invest together in defense, which is a genuine European public good that benefits our citizens and strengthens our economic security,” Cuerpo said.
Backing From Brussels and Beyond
Spain’s initiative complements the European Commission’s proposed rearmament strategy, which includes loosening fiscal rules to boost defense spending, potentially mobilizing €650 billion over four years, and a €150 billion loan instrument funded through common debt issuance.
European Commissioner for the Economy Valdis Dombrovskis welcomed the Spanish proposal, saying the commission is “ready to explore new options.”
He noted that the Spanish proposal aligns with ongoing discussions among EU member states, including recognizing defense as a European public good and addressing unequal security burdens across the bloc.
“There is a clear awakening in Europe regarding security,” said Polish Finance Minister Andrzej Domański, who hosted the meeting.
“Many countries have shifted their stance compared to a year or two ago, and there is a stronger willingness to increase spending.”
He praised the solidarity of southern EU nations with their Eastern and Central European counterparts and said a majority of member states now support finding new financing mechanisms.
Domański also stressed the urgency of reaching agreement on the commission’s proposed the Security Action For Europe (SAFE) instrument by May, and encouraged EU countries to request flexibility in fiscal rules by the end of April so that adjustments can be approved by July and enable higher defense spending. EFE
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