Germany has rejected proposals to create a new multilateral defence bank, dealing a major setback to efforts aimed at establishing a global state-backed lender to accelerate European and NATO rearmament. The country’s finance ministry told Reuters that Berlin opposes introducing any additional financing instruments for the defence sector and stressed that neither the proposed Defence, Security and Resilience Bank (DSRB) nor the European Rearmament Bank (ERB) is under discussion in the EU or NATO.
A ministry spokesperson said strengthening defence capabilities remains a priority but that the government wants to focus on implementing existing tools rather than adding new layers of financing. Germany argues that defence procurement should be supported through the EU’s newly launched Security Action for Europe scheme, known as SAFE, which offers member states up to 150 billion euros in loans for joint military purchases.
The duelling ERB and DSRB proposals seek to build a triple-A-rated international lender capable of raising large sums quickly for European defence projects. The ERB has argued that a multilateral bank would mobilize far more capital and encourage coordinated defence industrial expansion across Europe. The DSRB, whose development group is led by Rob Murray, has previously said its initiative would complement SAFE by directly lending to defence firms and ultimately aims to raise around 100 billion pounds. The ERB, which has invited European NATO members to participate as shareholders, hopes to raise up to 250 billion euros in capital markets using roughly 10 billion euros paid in by members over three years. It has even approached the DSRB to avoid competing pitches.
Germany’s stance deals the second significant blow to the DSRB in months, after the British government distanced itself from the idea in September. Berlin maintains that it gains no financial advantage from borrowing through a multilateral bank because it already secures the best refinancing conditions on its own. Despite this, the DSRB continues to list major banks including Deutsche Bank, JPMorgan, Commerzbank and ING as supporters.
Pressure on Europe to expand its defence capabilities continues to mount. U.S. officials recently told diplomats in Washington that the United States wants Europe to assume the bulk of NATO’s conventional defence responsibilities by 2027, from intelligence assets to missile systems. Germany’s preference for existing mechanisms over new institutions suggests that Europe’s push to build up its defence industrial base may proceed more through current EU tools than through the creation of a new global lender.
