Lithuania open to consider joint EU borrowing for defense – minister

VILNIUS – Lithuania is open to considering joint EU borrowing to finance defense, similar to the instrument used during the COVID-19 pandemic, Finance Minister Gintare Skaiste said on Monday.

"Another instrument that we'd be open to considering is joint borrowing," Skaiste said after meeting with Paschal Donohoe, president of the Eurogroup, in Vilnius.

"This would be similar to the SURE instrument that was in place during the pandemic and allowed us to have lower borrowing costs than we would have had if each country had borrowed separately," she said.

According to Skaiste, a joint European borrowing instrument could partly finance projects planned in Lithuania, such as the hosting of a German brigade, the creation of a national army division, and the introduction of universal conscription. 

"This could also be done by issuing defense bonds, which is currently being discussed at the national level. But having a European instrument could also be one of the convenient ways of financing certain deviations from the standard level of financing," she said.

Skaiste also agreed that the European Investment Bank (EIB) could increase its funding for defense with a broader mandate.

"Similar issues are also being raised by other EU countries to look more broadly at the development of dual-use products, but also to slightly broaden the possibilities to invest in the development of the defense industry in Europe," the minister said. 

"We are talking about ambitious goals to invest more in defense within the EU, so it seems necessary to discuss additional instruments," she added.

The idea of joint borrowing, similar to the support package proposed by the EU during the pandemic, to finance defense spending was put forward by France and Estonia at last week's meeting of the European Council.