The European Union could pursue a plan to issue Eurobonds as a means to reinvigorate Europe’s defense industry. This stance was outlined by Estonian Prime Minister Kaja Kallas at a gathering in Munich. Bloomberg reports that the proposal centers on a pan-EU debt instrument rather than relying on individual national bonds to mobilize the necessary capital.
The argument emphasizes that collective issuance by the EU is essential to attract the scale of funding required for defense projects that cross borders and benefit multiple member states. National bonds, by contrast, tend to appeal to narrower investor bases and often struggle to reach the total investment needed for modernizing defense capabilities across Europe (Bloomberg).
Support for Eurobonds reportedly came from high-profile European leaders. French President Emmanuel Macron and European Council President Charles Michel were cited as endorsing the idea as a path to strengthen the continent’s defense posture and strategic autonomy (Bloomberg).
During the week, Ursula von der Leyen, the President of the European Commission, indicated that a comprehensive strategy for the EU’s defense industry would be unveiled in March, signaling a coordinated approach that aligns procurement, research, and production across member states (Bloomberg).
Former European Union foreign policy chief Josep Borrell noted that the current defense industrial base across EU countries appeared unprepared for the geopolitical pressures stemming from the Ukraine crisis and the broader Russia context, underscoring the urgency of a unified funding and policy response (Bloomberg).
In related remarks, EU officials signaled that a redefined position in the defense sector could emerge, with funding mechanisms and strategic initiatives designed to harmonize capabilities and accelerate collaboration among member nations, suppliers, and research institutions (Bloomberg).