EU Defense Industry Plan Faces Funding Challenge

Welcome to the Brussels Edition, Bloomberg’s daily briefing on what matters most in the heart of the European Union.

The Commission will unveil a sweeping plan to boost the bloc’s defense industry today, but unless it can find sufficient funds the initiative risks falling flat. Under the strategy, the EU will ramp up weapons production and allocate cash for joint military projects, including missile defense. But with the budget already agreed, it will at most have a few hundred million euros a year to spend on defense over several years. According to a document we’ve seen, that has France, Poland and Estonia proposing that the bloc take an approach similar to the one it took to fight the Covid-19 pandemic, when joint bonds were deployed. “The risks of a defense industry ill equipped to meet the demands of the new security reality are no less strategic and no less deserving of a common response,” the document says.