Estonia Proposes €100 Billion Eurobond Issue for Defence

The European Union is urged to consider issuing €100 billion in eurobonds to support its own defence industry, while simultaneously boosting arms supplies to Ukraine. This proposition comes from Estonian Prime Minister Kaja Kallas in an interview with Bloomberg.

Kallas believes that the incoming European Commission, following the June elections, should adopt a cohesive approach to security similar to the one employed during the fight against the coronavirus pandemic.

"We need to invest more and explore what we can do together because bonds issued individually by countries are too small to scale. Joint eurobonds can have a much larger impact," noted the Estonian Prime Minister.

The idea of joint financial measures to strengthen the continent's defence capability was also endorsed by French President Emmanuel Macron and European Council President Charles Michel. However, more conservative countries such as the Netherlands and Germany might be less interested in this proposition.

Following meetings with American lawmakers in Munich, Kallas also expressed confidence that the US Congress would reach an agreement on financing Ukraine. She highlighted that during these meetings, American representatives better grasped the threat facing Ukraine.

The Prime Minister also stressed the urgent need for EU action to assist Ukraine, including efforts to support its industrial development and secure long-term contracts for arms supplies. Additionally, conducting a detailed analysis of available weapons stocks and exploring procurement opportunities to deliver to Kyiv is crucial.

Kaja Kallas pointed out that for some countries, the threat posed by Russia remains more of an "intellectual discussion" than a concrete concern.

"They acknowledge and support Ukraine in words, but in practice, they might not act sufficiently because they don't realize how real the threat is," noted the Estonian Prime Minister.

She also called on allies to fulfil their pledge to spend 0.25% of GDP over the next four years to support Ukraine, arguing that such a level of support could tilt the balance in Kyiv's favour in its efforts to resist Russian aggression.