Finland, 18 EU countries urge EIB to increase defence financing

Finland and the majority of the EU Member States sent a joint letter calling on the European Investment Bank (EIB) to increase its financing for the European defence industry, said a government press release on Friday.

The letter, drawn up at the initiative of Prime Minister Petteri Orpo and endorsed by two thirds of the EU Member States, including France and Germany.

The letter has been signed by the leaders of 19 Member States in total. The other signatories are Belgium, the Netherlands, Italy, Greece, Croatia, Cyprus, Latvia, Lithuania, Luxembourg, Romania, Spain, Sweden, Slovakia, Denmark, Czechia and Estonia.

“Strengthening the EU’s defence is an existential question for Finland and for Europe as a whole. This means we have to use all the means at our disposal. Boosting private funding is a key priority. For Finland, it would be important that it would be possible for funding to be used directly for ammunition production, which is currently not possible,” said Orpo.

In the letter, the heads of state stressed the urgent need to mobilise additional defence sector investments in order to strengthen the EU’s defence capability and comprehensive security.

The issue is especially topical, as the EU leaders will be discussing European defence in their informal retreat in Belgium on 3 February, as well as at the European Councils in the first half of the year.

There are still limits on the ability of the European Investment Bank to finance defence projects. Despite the flexibility added to the financing rules last year, the EIB cannot currently participate directly in defence production projects.

The letter proposed that the list of excluded activities from EIB financing should be re-evaluated to reflect the EU’s current policy priorities. This would mean that, going forward, the EIB would be able to provide financing for traditional defence industry projects. Secondly, the proportion of financing allocated to defence should be increased. A third measure proposed in the letter is earmarked debt issuance by the EIB for the defence projects.

At the moment, the EIB issues bonds earmarked for clean transition projects, for example.

The statement is a follow-up to the letter sent in March 2024. At that time, 14 EU heads of state called on the EIB to increase its investments in order to strengthen the EU’s defence and security capabilities.