He argued instead that issuing common debt to finance “public goods” such as defense and electricity interconnectors is a “no-brainer.”
“There is a clear case there to give continuity to what we’ve been doing with Next Generation EU,” he said referring to the bloc’s €650 billion post-Covid recovery scheme that was financed through common borrowing.
Madrid’s calls for joint debt come as the bloc grapples with U.S. President Donald Trump’s sudden move to end the war in Ukraine — and potentially reduce the American military presence in Europe in the years to come.
In June last year, the European Commission estimated additional defense investment of around €500 billion is needed in the EU over the next decade.
Despite the urgency, the idea of joint debt is still politically toxic for more fiscally conservative states in Northern Europe.
“More common debt is not the way forward,” Dutch Finance Minister Eelco Heinen told reporters on his way into the meeting of finance ministers, known as the Eurogroup, on Monday. In his view, politically unpopular budget cuts must compensate for more defense spending “because the money is not free.”