Eurobonds could finance EU air defense shield, says leading think tank

Brussels should issue Eurobonds to pay for a new European anti-aircraft defence shieldas recommended Bruegel in a report published on September 17.

Bruegel’s proposals fulfill a key electoral promise of the Commission PresidentUrsula von der Leyen, but they could also set off alarm bells in Berlin, which has consistently opposed joint indebtedness.

Russia’s invasion of Ukraine may have revealed Europe’s vulnerabilitybut a Israeli style air defense shield could cost hundreds of billions of euros, requiring creative thinking, the Brussels-based think tank says in its report.

The report’s co-author, Guntram Wolff, explained to ‘Euronews’ that “we must resort to debt to pay off the large initial capital“: “It really can’t be financed with current budgets.”

“Any single country will not provide a sufficient amount of air defense; doing it together makes a lot of sense“said Wolff, who is a senior fellow at the think tank.

Although the enormous capacity of Russian drones and missiles is the main threat, he says Europe must also be prepared for attacks by non-state actors or hybrid warfare, such as Houthi-style militias within its borders.

In his July manifesto for his second term, Von der Leyen said she would make the European anti-aircraft shieldtogether with the reinforcement of the cyber defensea project of common interest, which implies that they would benefit from EU funding.

The President of the European Council, Charles Michel, has also promoted The idea of ​​EU defence bonds to raise funds for military capabilityBut the idea is controversial among Germany’s hawks, who frown on what they see as subsidies to weaker EU economies.

Any EU system would have to choose between the multiple options available on the market, such as the American-made Patriot systemthe German IRIS-T or the Franco-Italian SAMP-T. The Bruegel report suggests that the EU could start immediately acquire existing producerswhile investing in research to make them work together.

The most worrying thing is that The Commission is prohibited from spending directly on military equipmentamong other things because EU members such as Ireland and Austria do not want to contribute to anything that would undermine their neutrality.

According to Bruegel, this problem can be avoided by presenting the plans as a investment in EU industry. In fact, Von der Leyen has promised that the new systems “They will be designed, built and deployed on European soil“.

This protectionism could cause displeasure in the United Statesbut Wolff is confident that German reservations will dissipate.

In the next one or two years, There will be a lot of demand to strengthen our defense capabilities“he said, adding that German politicians – both those currently in government and those in opposition – “will have to think about this, How to finance large initial investments“European debt is one way to do this.”