EU and UK in talks about financing defense across Europe amid fear of retreat

Unlock Digest Editor free

Halef’s roller, FT editor chooses his favorite stories in this weekly newsletter.

This week, Britain will join the EU leaders in the groundbreaking negotiations on the creation of an agreement on financing protection in Europe, as the continent is fighting to improve its military against the background of the US security blanket.

This week, British Chancellor Rachel Rivz will hold talks with other European finance ministers at a G20 meeting in Cape Town when the war in Ukraine enters its fourth year.

“It may be a fund or bank. For example, there is a concept Bank of DadrammamentWhat we are considering, ”said Polish Finance Minister Andreez Domansky.

Domanski said The Financial Times that the discussions were held with the UK for months, adding: “Without UK, it is difficult to imagine the defense of Europe.”

The Treasury of the UK confirmed that Reivz “to raise proposals for defense with their European counterparts” on the G20, but said the negotiations were at an early stage.

Donald Trump demanded that NATO European Allies increase the cost of defending up to 5 percent of GDP, from an existing 2 percent goal that some still do not reach or risk losing US protection.

The rapid re -inclusion of the US president with Russia, a country that most European countries see as an existential threat, caused crazy discussions on how to collectively strengthen Europe’s defensive capabilities and reduce dependence on US troops and weapons.

On Sunday German Incoming Chancellor Fried Merz He stated that Germany had to fundamentally convert their arrangements on security and end the decades depending on Washington, saying that Trump was “largely indifferent to the fate of Europe and the continent necessary to” achieve independence “.

Collective European defense spending was widely discussed during the call this weekend between the President of the European Commission Ursuli von der Leyen and the Prime Minister Keir Starr, as well as a separate call between von der Leyen and Prime Minister Jonas Gara, words informed of a panel of discussion.

European countries are looking for ways to increase defense opportunities during severely limited national budgets. Using national guarantees, the bank will allow countries to increase costs without increasing its balances forward.

The UK is looking for ways to increase protection costs from 2.3 percent of GDP to 2.5 percent, which costs at least £ 5 billion a year, at a time when its ability to increase costs is strongly limited by its fiscal rules.

Among the proposals are General Sir Nick Carter, a former British troops who offered a “rethinking bank” to join the European Bank’s savings pool for reconstruction and development – a lender created after the fall from the Iron Curtain and Eastern Europe.

“The Treasury is interested in this,” said one person who participated in the discussions with the Riva team. However, the Treasury officials said there were many multilateral financing models on the table, and that the jerk had an open mind in the next steps.

Experts said the benefit for the Bank of the Certain Certain was that it would mitigate the impact of additional protection costs on financial rules.

Andy King, a former UK official, who is now in the Flint Global Counseling, said such a bank has a potential for “significant resources for protection without affecting financial rules.” He added: “This is not a certain result: the details will be important in terms of how the subject was structured and how it used its credit power.”

The EU leaders will consider the general needs of the protection at the end of March, and Poland will succeed in financing the EU ministers in April, ahead of the leaders in June.

The European Commission stated that this month it will partially raise EU financial rules to allow countries to invest in defense, and this will allow countries to borrow without sanctions.

Von der Leyen also opened the door for “ordinary European financing” on common defense projects, and is expected to describe financing options in detail in March.