Threats from Russia
Summit in Brussels: Scholz rejects EU debt for armor
Updated on 04.02.2025 – 02:03 a.m.Reading time: 3 min.
According to estimates, a three -digit billion sum is required to effectively upgrade Europe. But the coffers of many countries are empty. Solution options come on the table at a top meeting.
Chancellor Olaf Scholz has again given a clear cancellation at an EU top meeting in Brussels together for armaments investments. There is no such perspective, the SPD politician said on Tuesday night after the consultations. The task must be to create more flexibility for the individual countries.
Scholz thus alluded to considering the upper limits for government debt and deficits from the EU countries in order to better prepare for possible threats from states such as Russia. EU Commission President Ursula von der Leyen said after the informal summit: “I am ready to explore the entire range of the scope available to us in the new stability and growth pact and will exploit it in order to enable a significant increase in defense spending.”

The Leyen argued that national households were restricted by the EU debt rules. Exceptional measures are possible for extraordinary times. The use of exception rules could give the member states much more fiscal scope.
The stability and growth pact stipulates that the debt of a Member State must not exceed 60 percent of the economic output. At the same time, the deficit must be kept below three percent of the economic output. The pact had been reformed after long negotiations last year. Germany had vehemently campaigned for comparatively strict guidelines.
EU Council President António Costa had invited to the summit in Brussels to advise on possible joint initiatives to expand defense skills and financing issues. Numerous countries had recently been open to so-called Eurobonds or other joint EU financing. So far, Germany and countries such as the Netherlands and Austria categorically reject this.

According to estimates by the EU Commission, additional defense investments of around 500 billion euros will be required in the next ten years. A European air defense system and an increased securing of the eastern land border of the Union are considered possible EU projects, for example.
At the top meeting, a possible stronger integration of the European Investment Bank (EIB) in armaments projects was discussed. The Commission wanted to work with the EU Förderbank to make lending more flexible, said von der Leyen.
In order to boost armaments production, the EU had already changed the EIB for money flows into industry in 2024. There are more options for investing in so-called dual-use goods-i.e. products that can be used for civilian and military purposes, such as helicopters or drones.
If the funding bank is also to invest in pure armaments projects, the 27 member countries would have to agree to a change in the mandate. However, critics have concerns that the EU’s good rating could suffer from such a change in mandate. This could result in higher financing costs.
As a third mainstay for more money for upgrading, more private funds should flow from the perspective of the EU Commission. “We have to conduct a dialogue with the private banking sector so that it modernizes its lending practice,” said von der Leyen. NATO also recently had demands for a change of heart of the financial industry for more investments in armaments companies.

Chancellor Scholz also made it clear that in his view, for example, strict competitive rules could be relaxed in order to increase the performance of the European armaments industry. France President Emmanuel Macron emphasized in Brussels that European industry should primarily benefit in all future investments in order to strategically independent the EU in the field of defense.
The discussion from Monday will serve as a contribution to concrete law planning for EU commissions, which are to be presented in March. There could be far-reaching decisions at the EU summer summit at the end of June.