EU increases budget of European Investment Bank to €100bn and triples defence funding

European Union flags fly outside the European Commission headquarters in Brussels, Belgium, 18 March 2025. Photo: Reuters.

EU countries have agreed to increase the annual lending limit of the European Investment Bank (EIB) to €100 billion and to significantly increase support for the defence sector.

The decision was made at a meeting of the bank's board in Luxembourg, Reuters reports.

According to the agreement, the bank will be able to triple its financing of defence projects — from €1 billion last year to €3.5 billion this year. In addition, more than €70 billion is planned to be invested in technological innovation and renewable energy.

Although the EIB is not allowed to finance the purchase of arms or ammunition, it can provide loans for dual-use projects, such as military infrastructure or navigation systems. One such project has already been financed in Lithuania — a base near the border with Belarus, where German troops will be permanently stationed in another country for the first time since World War II.

This decision coincides with the preparations for the NATO summit in The Hague, where a new wave of pressure is expected to be put on member states to increase defence spending. In addition, the EU's position was influenced by Donald Trump's statements about a possible reduction in US security support for Europe.

As a reminder, the European Commission and the European Investment Bank(EIB) have signed a guarantee agreement that will allow the EIB to provide at least €2 billion for priority recovery and reconstruction projects in Ukraine.