EU to lift EIB lending limit to $115bln in defence push
LONDON/BRUSSELS - EU governments have agreed to lift the annual spending of the bloc's powerful European Investment Bank (EIB) lending arm to 100 billion euros ($115 billion) this year and treble its funding for the EU's defence industry.
Sources briefed on the plans said the decision was approved at an EIB board meeting in Luxembourg ahead of a formal sign-off expected by EU finance ministers later on Friday. They spoke on condition of anonymity because the information was not yet public.
The new 100 billion euro annual spending ceiling is more than 10 billion euros above the amount the EIB lent last year and 5 billion higher than 95 billion euros the bank's President Nadia Calvino set as a target at the start of the year.
It will also allow it to more than treble its funding for defence-related projects. The amount will go up 3.5 billion euros from 1 billion euros last year and be well above the 2 billion euros it had flagged would be spent back in January, the sources said.
The EIB is prohibited from investing directly in weapons or ammunition but it can lend for so-called "dual use" purposes, such as GPS systems or buildings and infrastructure for army bases.
It has signed off on funding for one such base in Lithuania near the border with Belarus where German troops are due to be permanently deployed on foreign soil for the first time since the Nazi military in World War II.
European nations are scrambling to ramp up their defence spending amid pressure from U.S. President Donald Trump who has signalled plans to reduce the decades-long U.S. security backstop for the continent.
It also comes just days before a NATO summit in The Hague where the alliance's members are under pressure to raise their defence commitments.
The increased EIB lending is set to funnel money into other areas as well, the sources said, including technology innovation and renewable energy.
It follows a mid-year review of its operational plan and comes after it got approval last year to raise its so-called gearing ratio, which sets out a nominal maximum for the amount of loans on its balance sheet as a percentage of its subscribed capital.
EU officials said the bank, already the biggest multilateral lender in the world, is also likely to announce plans to pump 70 billion euros into the development of European technology firms over the next three years.
The programme, called Tech EU, aims to help Europe better compete with China and the United States in the race for cutting-edge tech like supercomputing, robotics and artificial intelligence as well as renewable energy.
The 70 billion euros funding is to be split into 20 billion euros for equity and quasi-equity, 40 billion euros for loans and 10 billion for guarantees in 2025-2027, the officials said.
They hope the money to mobilise a further 250 billion euros of private investor funding and complement broader European Commission efforts to support startups and higher risk ventures.
($1 = 0.8727 euros)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arabian Post
an hour ago
- Arabian Post
EU Intensifies Oversight of Musk's xAI–X Deal
European Commission regulators have launched an in-depth inquiry into the corporate restructuring of X following its $33 billion acquisition by Elon Musk's AI venture, xAI in March. Officials have issued formal information requests probing whether the deal reshaped the obligations and liabilities under the Digital Services Act, which could trigger fines of up to 6 per cent of global turnover or even a suspension of operations within the EU. At stake is not merely compliance but scope. Brussels is examining if revenue from Musk's wider corporate empire—including xAI, SpaceX, Neuralink and The Boring Company—should be aggregated with X's earnings when calculating any DSA penalty. Such consolidation would dramatically increase the financial stakes, positioning the potential fine among the largest ever under the regulation. This intensified scrutiny builds upon a probe initiated in December 2023 over allegations that X failed to curb harmful content and employed deceptive design. The spotlight has honed in on features such as the blue check verification, which critics say misled users into attributing credibility purely on subscription status. X has contested these accusations, reflecting the gravity with which Brussels regards compliance under the DSA. ADVERTISEMENT Regulatory sources indicate that Brussels aims to reach a decision before its summer recess in August 2025—though there remains a possibility that deliberations will extend. If a penalty is levied, whether tied solely to X or inclusive of Musk's other holdings, the platform could face a multi‑billion‑dollar bill. Repeat offenders risk more severe sanctions, including operational bans within the bloc. The commission's current line of inquiry follows earlier requests for internal documentation on X's algorithmic decision‑making and moderation protocols issued in January 2025, aimed at uncovering systemic bias or political amplification. EU digital chief Henna Virkkunen has signalled that the commission's enforcement of the DSA will be uniform across all major platforms—regardless of headline-grabbing personalities or companies. For the xAI–X merger, Brussels appears particularly concerned with whether the March acquisition alters liability thresholds or the classification of X as a 'Very Large Online Platform'—a designation that comes with more rigorous reporting and compliance obligations. The structure of the deal could influence if DSA fines are calculated based solely on X or on the broader Musk group. European digital regulators are keen to demonstrate the potency of the DSA, which took effect in late 2022, aiming to set a precedent in holding tech giants accountable across interconnected corporate structures. X's contested manoeuvres with the blue checkmark and structural repositioning have become emblematic of the challenges regulators face enforcing meaningful accountability. Musk's companies have so far declined to respond to the commission's most recent information requests. Meanwhile, EU officials continue to gather internal documents, revenue data and structural filings to determine the extent of exposure under DSA provisions before any final ruling.
Arabian Business
2 hours ago
- Arabian Business
European space ambitions need Gulf partners
I f Europe wants to stand on its own two feet, it must look up – literally. Space, once associated only with exploration – or, more cynically – national vanity projects, has become crucial to the economic health, security, and soft power of any government, national or regional. That's one reason why Josef Aschbacher, head of the European Space Agency, has called for more investment in the sector. Europe, he argues, cannot afford to lag behind. The ambition to be 'strategically autonomous' and shape its own future depends on catching up in an area where other powers, the U.S. and China most notably, are pulling ahead. Space technology, it's crucial to note, is not just about satellites and rockets even though culturally, that's often what comes to mind when people think about it. This perception has been strengthened by Elon Musk's SpaceX, which communicates aggressively around its many launches. Space in fact touches everything from military equipment and weapons to communications infrastructure to environmental monitoring and supply chain efficiency. A recent study published by the World Economic Forum and McKinsey underscored how 'space-based technologies are revolutionising the supply chain, transportation, and mobility sectors, positioning them as the fastest-growing segment of the global space economy.' In these areas, Europe has some of the world's best engineers. But it consistently fails to support the companies where they work with meaningful investment. Compare this situation with that of the Middle East. The Gulf region has become a surprising contender in the new space race. The UAE and Saudi Arabia, once absent from this arena, are now outspending many of their Western counterparts and making rapid progress. In just over a decade, they have poured $25 billion into the field, and that is expected to grow to $75 billion by 2032. First, national security remains essential. Secondly, they need to plan for the post-oil era. The Gulf economies rely heavily on oil, and they will be in deep trouble if they do not diversify their economies. Thirdly, they need to prepare the labour market for the twin challenges of automation and climate change. They are also closely aligned with strategic initiatives: AI, autonomous systems. Space covers all of these. It promises robust security, long-time prosperity, and future-proof jobs, as well as national prestige and the tools to adapt to an uncertain world. But the Middle East and Europe need not see themselves as rivals. The Gulf states are actively looking for partners; they want to develop their space infrastructure further. They are becoming global hubs of innovation. And Europe, with its highly skilled, highly educated workforce and depth in advanced technology, should be an obvious ally in this undertaking. A paradigm shift is underway: those countries that fail to see how much more the Middle East is than a source of capital will fall far behind. Europe would benefit from the support. It has many promising space companies developing world-beating dual-use technologies. With more funding and backing, they could scale rapidly: ICEYE, one of Europe's most exciting space companies, has benefitted hugely from its presence in the Gulf. Growing fast would stop lesser companies in other nations from appearing, gaining more funding, and out-scaling them. In the United States, small, innovative companies have long been seen as the key to remaining at the forefront of innovation, and those companies receive generous funding for that reason. In Europe, procurement processes badly need rethinking, and there is still some hesitation around investing in defence, which often overlaps with space. There was a time when the Middle East was viewed (wrongly, even then) as a source of oil money and little else. That has changed: it is now widely viewed as a genuine industrial power, as well as a large and growing market and a vital bridge and trading point between East and West. If Europe were to collaborate with the United Arab Emirates, it could get much more than funding. The Gulf is vast, with open landscapes and a climate perfectly suited for the testing of advanced, satellite-based tech. Europe is densely packed and its regulations are stringent. The Gulf, for its part, would gain European know-how, which would accelerate its development in space. Jobs, knowledge transfer and commercial opportunities would also follow. So a strong Europe–Middle East alliance in space would serve both sides: creating economic opportunities, reducing dependency on unpredictable allies, and developing infrastructure that will define the next century. It's a win-win. The Middle East is ready and waiting. It has shown that it's looking ahead to the future, and it is eager to join hands with countries and regions for mutual advantage: the slew of multibillion-dollar U.S. tech deals struck by Saudi Arabia, the United Arab Emirates and Qatar shows that. Europe, which for a long time has relied on others, and has been able to invest in its social infrastructure due to the promise of U.S. military support, badly needs to work with other countries to ensure its security and the quality of life of its citizens. It should act now. The clock is ticking.
The National
3 hours ago
- The National
Ballistic missiles 'keywords' at Paris Air Show as Israel-Iran conflict looms large
The Israel-Iran conflict loomed large over the Paris Air Show this week, accelerating talks on defence products and forcing airlines to suspend routes to the Middle East. The conflict brought a sense of urgency to the defence discussions at the event, which showcases the latest technology in defence and commercial aviation. 'Because of the geopolitical context and what is currently happening in the [Middle East] and a bit in Europe, a keyword here is ballistic and anti-ballistic [missiles],' Hervé Dammann, executive vice president of land and air systems at Thales, told The National on the sidelines of the show. 'How can we make sure our countries are protected well enough against ballistic and hypersonic threats – the two kinds of missiles that are currently believed to be in use in the Middle East? This is really the key topic of discussion: What do you need to detect, what do you need to intercept and which kind of system can be used. 'The mood here is the need to accelerate and implement those kind of capabilities. For the industry, it means that we need to be agile and ramp up production capacity. We need to find ways to accelerate putting solutions in the market, maybe in an incremental approach rather than waiting for having developed a full solution,' Mr Dammann said. In response to increasing customer demand, Thales has tripled the production of sensors in radars and quadrupled the production of effectors, he said. 'We are continuing to invest in support of the higher demand requests we have coming from many [ministries of defence], whether in the Middle East or in Europe or in Asia,' the Thales executive said. On the first day of the show, France's move to shut down the main Israeli company stands for refusing to remove attack weapons from display sparked a furious response from Israel. The show, which ends on Friday, displayed cutting-edge military technology and staged flight demonstrations that ripped through Le Bourget's blue skies. They were also a stark reminder of military capabilities used to deadly effect thousands of kilometres away in Tehran and Israel. 'We see it more as citizens at the moment: it is extremely worrying to see tensions and escalation in this region of the world,' Jean-Brice Dumont, head of air power at Airbus Defence and Space, said at a press briefing during the air show. 'For ethical reasons, I would say we refrain from making business interpretation out of it. Now, it is true that it is one more sign of an escalation somewhere in the world, which, overall, in military volumes, is leading the volumes up.' The European plane maker is pursuing potential new buyers, including the UAE and Saudi Arabia, for its A400M military transport aircraft. Mr Dumont said there are 'quite intense' discussions with the UAE's air force, Tawazun and defence entities in the government. 'The discussions are very, very constructive,' he said. 'Now, it's a competition. The one who's going to win will be the supplier of the mobility of the future for the UAE. We believe we have the right solution, having an aircraft that is the strategic and tactical one.' Flight disruptions In the skies beyond Le Bourget airport, some US airlines began suspending daily flights to Gulf countries amid the escalating conflict in the Middle East. American Airlines on Thursday suspended daily flights from Philadelphia to Doha until June 22. United Airlines temporarily halted services between its hub at Newark Liberty International Airport in New Jersey and Dubai and aims to resume 'when it's safe', according to its website. American Airlines' move comes after the US embassy in Qatar advised its personnel and US citizens in the country to 'keep a low profile' and 'stay alert' at locations publicly associated with the US. 'Out of an abundance of caution and in light of ongoing regional hostilities, the US Embassy has advised its personnel to exercise increased vigilance and has temporarily restricted access to Al Udeid Air Base. We recommend that US citizens in Qatar take similar precautions,' it said in a statement on its website. The US airlines' flight suspensions are the first disruptions on the doorstep of some of the region's busiest air hubs. Previous flight suspensions were limited to Israel, the countries surrounding it and the airspace above countries where Iranian missiles pass. Dubai and Doha are home to Emirates and Qatar Airways that use their strategic locations for long-haul travel, connecting passengers between the US, Europe and Asia. Emirates has suspended all flights to Amman and Beirut until June 22. Flight suspensions to Tehran, Baghdad and Basra will continue until June 30. Elsewhere, Saudi Arabian low-cost carrier flyadeal said it is experiencing only minimal disruptions. 'We've not had any significant impact as a result of airspace closure in parts of the region. While our flights to and from Amman have been cancelled until further notice, operationally, we're only experiencing minor disruptions with changes to flight routings on a few services to avoid the affected areas,' Steven Greenway, flyadeal's chief executive, told The National. 'With the upcoming peak summer season, we are preparing for a busy flying programme that will maximise our fleet utilisation.' The Israel-Iran attacks are the latest global conflict to ratchet up airlines' security concerns, while weighing on their operations and profitability. Airlines are grappling with airspace closures, threats from missiles, drones and GPS jamming. 'The big topics that we are facing is the global navigation satellite system (GNSS), so we see more and more … areas where the signal is not available or is spoofed,' Denis Bonnet, head of innovation research and technology at Thales, told reporters. 'We are working very hard with our [original equipment manufacturers] to make sure that we are more resilient to this … so it's becoming safer and safer.' The number of global positioning system (GPS) signal loss events increased by 220 per cent between 2021 and 2024, according to International Air Transport Association data. It is 'difficult to see this trend reversing in the near term', Iata said in a statement this week. Thales' flight management system, installed on more than 7,000 planes and cumulating more than 100 million flight hours, allows pilots to modify the flight trajectory quickly and simply, Mr Bonnet said. 'The capability we try to bring to airlines is to detect those threat areas and modify the trajectory … usually we prefer to do this before take-off,' he said. Another key topic is the use of satellite communications onboard aircraft, particularly in remote areas. 'When there is this huge tension between Israel and Iran, a lot of aircraft has to be re-routed and [satellite communications] have been absolutely vital to connect the crew in areas that are not really well covered by connectivity,' Mr Bonnet said. Airbus aircraft orders This Paris Air Show was unusually subdued following Air India's Boeing 787 crash, which created a sombre mood and kept Boeing's leadership away to focus on the accident investigation. Airbus secured firm orders for 142 aircraft. This does not include the six Airbus A350-900 announced by Egyptair at the show as this was a previously unidentified customer on Airbus' previous order reports. It also recorded 102 provisional orders that would increase its haul if airline customers choose to exercise those options. The firm orders are worth $14.2 billion including Egyptair's deal, plus 102 provisional orders worth $6.7 billion, Reuters reported, citing estimated delivery prices from UK-based Cirium Ascend. The air show is usually a hard-fought competition between the duopoly of plane makers. But Boeing had a quiet show as it chose to postpone any commercial announcements following the Air India crash just a few days before the expo. The 787 Dreamliner crashed in the Indian city of Ahmedabad shortly after take-off on June 12, killing all but one of the 242 people on board and at least 30 more people on the ground. Air India's Boeing plane was 'well-maintained' before it crashed a week ago, AFP reported, citing an airline statement on Thursday. Indian authorities have yet to reveal the cause of the crash as investigators work to retrieve data from the plane's black boxes – the cockpit voice recorder and the flight data recorder.
