Brussels plans “potentially massive” fundraising for energy and defense Business

The European Union has taken an important step towards integration with joint bond issuance projects to raise funds for defense and energy.

The plans, which could be presented after an emergency summit of European leaders in Versailles on Thursday, will aim to help the bloc cope with the shock waves of Russia’s invasion of Ukraine.

Details of the proposals, reported by Bloomberg, are scarce, with officials still determining how much money could be raised, but it could be on a “potentially massive scale”.

Paolo Gentiloni, the economy commissioner, told MPs on Monday evening: “We need to find new tools to respond to the new issues that this crisis raises before us.”

Officials said the plan would likely involve the European Commission issuing bonds and then lending funds to member states to fund defense and energy spending.

The sweeping move would mark a second major increase in EU-wide spending after the EU’s €1.8 billion emergency plan to deal with the fallout from the pandemic.

Several EU members, including Germany and Denmark, pledged to increase defense spending following Russia’s invasion of Ukraine, reversing a long period of non-compliance with their NATO commitments.

The conflict has also prompted countries to consider accelerating efforts to wean themselves off fossil fuels, with oil and gas prices soaring as the continent braces for a shortage of supplies from Russia.