Germany Rejects New Defence Bank Proposal Amidst EU Rearmament Debate

Germany has refused proposals for a new multilateral defence bank aimed at rearming European and NATO countries, emphasizing strengthening existing defence mechanisms. Two competing proposals for such a bank have faced rejection, with concerns over the benefits versus existing systems.

In a significant development, Germany has turned down the idea of establishing a new multilateral defence bank, creating another setback for proposals aimed at forming a global state-backed lender for European and NATO rearmament. Government sources indicated that there are no discussions on this concept within EU or NATO bodies, according to a Reuters report.

The proposals, namely the European Rearmament Bank (ERB) and the Defence, Security and Resilience Bank (DSRB), have been actively seeking support from governments and financial institutions. However, the German finance ministry emphasized that bolstering defence capabilities would be best achieved through the EU's existing Security Action for Europe (SAFE) scheme, rather than initiating new financial instruments.

Despite Germany's opposition, pressure remains on European nations to bolster their defence, with the United States urging Europe to assume more of NATO's conventional defence responsibilities. Meanwhile, the DSRB continues to gather support from banks like Deutsche Bank and JPMorgan, aiming to raise massive funds for defence projects despite recent setbacks.