(Bloomberg) — Finland’s Prime Minister Petteri Orpo said it’s his personal opinion that joint borrowing by European Union members shouldn’t be ruled out if the funds were deployed to bolster defenses on the bloc’s eastern edges.
“I don’t rule out the option — as a personal view given there is no government stance on the issue — of using common European funding, including debt, to build up defenses provided the money is used where Europe is defended,” Orpo said in an interview on state-owned broadcaster YLE on Saturday. “Europe is not defended in the south or the west. It’s defended here in Finland, in the Baltics, in Poland, in the eastern areas.”
It’s a surprising reversal in a country usually vehemently opposed to pooling obligations on concern of moral hazard, or a fear that joint borrowing leads to complacency by governments.
The EU’s new defense chief, Andrius Kubilius, has floated a new joint borrowing mechanism for military spending as part of the bloc’s plan to seek some €500 billion ($512 billion) for security over the next decade. Germany, the region’s biggest economy, has been among members opposed to joint borrowing. But with Russia’s war raging in Ukraine, a number of governments that had opposed such a step have begun to waver.
Former Finnish President Sauli Niinisto, who delivered a report to European Commission President Ursula von der Leyen recently on the EU’s readiness to respond to crises, mentioned that a missile shield could be financed by joint borrowing. Danish Prime Minister Mette Frederiksen, among the EU’s “frugal” nations, has also expressed more openness to funding from joint debt.
France’s junior minister for European affairs, Benjamin Haddad, repeated calls for eurobonds to finance defense in the bloc in an interview with Le Figaro newspaper published on Saturday.
“The defense needs are so big that we can no longer finance them alone,” Orpo said.
–With assistance from James Regan.
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