ESM Says Eurozone Nations Could Access ESM Funds
In remarks to a news agency on Friday, ESM Director Pierre Gramegna stated that the fund—originally created to rescue economies overwhelmed by debt during the financial crisis—could now allow countries to increase their defense spending on credit.
“In these times of geopolitical turmoil, which have triggered higher expenditure, defense costs for all countries, we must use the full potential of the ESM,” Gramegna told the agency.
He added, “We have instruments. It is in the best interests of Europe ... to use the full potential.”
During the financial crisis, the ESM served as a lender of last resort, and its loans were conditional on strict economic reforms. Nations like Portugal, Ireland, and Greece that received ESM bailouts had to overhaul their banking systems and implement austerity budgets in exchange.
Gramegna emphasized that countries tapping the ESM for defense purposes would not face such conditions. However, the fund will only be accessible to euro-using nations, and any defense-related borrowing must receive approval from all 21 member countries, including neutral states like Austria, Cyprus, Malta, and Ireland.
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