Europe faces a shortfall of about 800 billion euros a year to close the gap with the United States in defense and technology investments. That is why France proposes to increase funding for the SAFE initiative through joint borrowing.
European Affairs Minister Benjamin Addam stated this, speaking on a panel at the Munich Security Conference.
The European Defense Challenge and the Path to Investment
«We have NATO, of which France is an active member. But we need to invest much more at the European level, because there is duplication, fragmentation, and simply a shortage, and a dependence that we must rid ourselves of»
– European Affairs Minister Benjamin Addam
According to Addam, the SAFE defense initiative requires substantially more funding, notably through raising joint European borrowings.
«That is, the European Commission borrows on the market and then lends to member states on favorable terms. We are short of about 800 billion euros per year, according to Draghi’s report, if we want to catch up with the United States. This will require both public and private financing. Public financing, of course, to serve as a lever for private. And that is why the proposal to go and borrow on the markets is common sense, and cheaper»
– European Affairs Minister Benjamin Addam
Addam reminded that the 90-billion-euro loan to Ukraine was obtained precisely under such a scheme – backed by eurobond guarantees, underscoring the importance of similar mechanisms for strengthening Europe’s sovereignty in defense.
He also highlighted the advantages of European preferences in the market for defense equipment and technologies.
«We support increasing the defense budget – we did so in France, our neighbors are doing the same. But how can you tell your population: we will increase the defense budget, we will cut spending in other places, and as a result this will subsidize a plant in Kentucky? That makes no sense. When you buy weapons in another region, you have fine print terms and limits on how you can use them. Do not look at the Trump administration, but at the Biden administration earlier. They enacted the Buy America Act, Inflation Reduction Act – these are major subsidy programs in the United States, or for American companies»
– European Affairs Minister Benjamin Addam
According to Addam, safeguarding Europe’s own interests in critical areas of sovereignty and national security can be achieved by bringing in other countries in the spirit of the Coalition of the Willing created to support security guarantees for Ukraine.
«If we talk about building European sovereignty, there is a strong case for a group of like-minded countries to move forward together. And let’s also consider how to attract countries such as the United Kingdom, Norway, Canada, just as we did with the Coalition of the Willing for Ukraine»
– the French Minister of Europe
Canada officially joined the “Actions in the Interests of Europe’s Security” (SAFE) program, which opens opportunities to obtain cheap loans from the EU for joint defense procurements.