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Germany and Netherlands oppose increasing EU defense funding - Bloomberg

Germany and Netherlands oppose increasing EU defense funding - Bloomberg Olaf Scholz, Chancellor of Germany (photo: Getty Images)

Germany and the Netherlands disagree with the call to make progress on financing options to increase defense spending for the European Union. This disagreement is hindering the agreement on a strategic agenda for the next five years at the summit in Brussels, which includes goals to strengthen security and defense, according to Bloomberg.

According to sources cited by Bloomberg, German Chancellor Olaf Scholz supports reservations about increasing joint spending to cover gaps in the bloc's capabilities. Bloomberg links this to issues within Germany's domestic budget.

At the EU summit that began on Thursday, leaders were surprised that amidst Russia's war against Ukraine, Germany and the Netherlands do not agree with the call to make progress on financing options for increased spending. Instead of discussing how to scale up and accelerate defense buildup, Bloomberg writes.

During a heated discussion, some leaders, notably from Denmark and Poland, remarked that it was fortunate neither Russian representatives nor Ukrainian President Volodymyr Zelenskyy were present in the room.

Scholz may count on the support of Dutch Prime Minister Mark Rutte to block any progress on financing. Both are opposed to additional European resources, including joint debt until other options are exhausted.

According to an EU diplomat, Rutte's stance, soon to be NATO's next Secretary General, on delaying progress in financing is surprising given his upcoming position. The Hague insists on a clear assessment of needs, improvements in the internal defense market, better procurement, and easier access to private capital before agreeing to use European funds.

However, EU diplomats believe that Germany's opposition will not end discussions on enhancing the bloc's defense capabilities, especially amidst Russia's invasion of Ukraine and escalating geopolitical risks.

Following Thursday's exchange of views, leaders were expected to request the bloc's executive body to present options for state and private funding to strengthen the defense industry and address critical gaps.

Germany is reluctant to entertain any new defense and funding statements beyond those agreed upon at the previous EU summit in March, arguing that there have been no new developments warranting changes, according to sources familiar with the matter.

On the eve of the summit, European Commission President Ursula von der Leyen stated that the EU needs €500 billion in defense investments over the next decade.