MNI: EU Split As Some Push To Keep Joint Borrowing Option Open
MNI (BRUSSELS) - European Union leaders are likely to split over whether to keep options open for more joint borrowing to boost military spending at this week’s summit, where they will also discuss European Commission proposals for a new EUR150 billion loan programme and an exemption from the bloc's fiscal rules for defence spending, an EU source told MNI.
While traditionally “frugal” Nordic countries Finland and Denmark are now taking a more open attitude towards more EU joint borrowing, going beyond the Commission's proposals, officials noted, the latest draft summit communique calls only for "continued work" on the EC's existing financing options for ramping up Europe's defence readiness over the next four to five years, in line with the wishes of the Netherlands and also of Germany. (See MNI: EU Defence Bond Approval To Pave Way For Summer Issuance)
But other countries, led by France, Italy and Spain, are pushing for a significant tweaking of the text along the lines of “consideration of all or different financing options," the official said.
Their point of view is, "this is what we want and it's inevitable we are going to need more money - i.e. more joint borrowing," the source said.
MIDDLE GROUND
Officials said there is now also a third group, led by traditionally frugal Denmark and Finland, which is seeking an open stance on how to best fund the bloc's defence plans.
"Their point of view is more, 'we have a plan which we need to implement and if the money is not enough then we will need to discuss what to do,'" the official added.
German diplomats have made clear that they will now accept the Commission’s proposal to exempt increases in defence spending of over 1.5% from fiscal rules for four years, after earlier calling for a longer exemption.
Officials said that summit talks could go late into Thursday night, given the heavy agenda, which also includes EU competitiveness and simplification of business regulation.