Latest news with #defenseinvestment
Associated Press
16-07-2025
- Business
- Associated Press
The EU chief unveils a new $2.3 trillion budget. Lawmakers say the math doesn't 'add up'
BRUSSELS (AP) — The European Union needs a new budget that would allow it to respond to crises like Russia's war on Ukraine or climate change, fund railways and energy grids, and protect farmers' livelihoods, the EU chief said Wednesday while unveiling her proposal totaling 2 trillion euros ($2.3 trillion). European Commission President Ursula von der Leyen, who heads the EU's executive branch, said that under her budget plan, spending on defense and space would increase five-fold, while investment in migration and border management would triple. The proposal kicks off two years of wrangling between the 27 member states which fund most of the budget and the European Parliament. The spending package — which runs from 2028 to 2034 — is seen as a statement about Europe's ambitions in the world. Von der Leyen described her plan for the budget – known as the Multiannual Financial Framework – as 'the most ambitious ever proposed.' 'It is more strategic, more flexible, more transparent, and we are investing more in our capacity to respond and more in our independence,' she told reporters in Brussels. But in an early sign of the troubles ahead, von der Leyen conceded that even within her own team of policy commissioners — which worked through the night to finalize the proposal – 'not everyone was satisfied with the amount.' EU lawmakers who will chaperone the commission's proposal through parliament over the next year and 2027, and who were briefed on it, said that the budget math doesn't 'add up.' 'However you try to package this, what we have is a real-terms investment and spending freeze,' they said in a statement. 'It is the status quo, which the Commission has always insisted is not an option.' Part of the numbers confusion is due to von der Leyen's insistence that national contributions to the budget will not increase. Extra funds would be found through 'a step change' in the way the commission raises its own money, she said. The EU as a bloc is not allowed to levy its own taxes, but it does earn revenue from things like customs duties and value added tax. The plan now is to get money through the carbon emissions trading system and a new tobacco duty, among other measures. At the same time, the EU must also pay off billions of euros in debt incurred by measures introduced to stop the spread of COVID-19 and to help revive economies after the pandemic. As for security, von der Leyen said 100 billion euros ($116 billion) should be set aside to help Ukraine rebuild from the ravages of the war, now in its fourth year. 'We are suggesting 100 billion euros ... to support recovery, resilience, and of course their path to the EU membership,' she said. Outside the commission headquarters, as von der Leyen's team debated the plan, around 200 farmers gathered and threw boots at the building. 'Everybody is talking about security for Europe. Everybody is talking about a stronger Europe. Well ,let me tell you, you can't get stronger with an empty stomach,' said Lode Ceyssens, head of the Belgian farmers trade union Boerenbond. ___ Associated Press journalist Sylvain Plazy in Brussels contributed to this report.
Reuters
15-07-2025
- Business
- Reuters
Pentagon to keep investing in US critical minerals projects, defense official says
July 15 (Reuters) - The U.S. Department of Defense plans to continue investing in critical minerals projects to ensure a diverse American supply of the building blocks for weapons and many electronics, a defense official told Reuters on Tuesday. The Pentagon signed a multibillion-dollar deal last week to become the largest shareholder in rare earths producer MP Materials (MP.N), opens new tab and also agreed to several financial backstop measures for the company. The move - which the defense official said reflected a desire to "share the risk" inherent in minerals projects - sparked questions across the mining sector about whether other companies could see similar investments from the U.S. military. The Pentagon has invested almost $540 million into critical minerals projects and "will continue such efforts in accordance with congressional appropriations and statutory authorities," the official said. "Rebuilding the critical minerals and rare earth magnet sectors of the U.S. industrial base won't happen overnight, but (the Pentagon) is taking immediate action to streamline processes and identify opportunities to strengthen critical minerals production," the official added. The U.S. government and military recognize that the country no longer can produce or process many critical minerals, but plans to "take the necessary time and precautions to produce critical minerals and associated products in a safe and responsible fashion," the official said, adding that approach was unlike China's. Chinese mining standards are considered to be lower than those in the United States. The MP deal structure reflects a "unique approach" by the U.S. government to "account for the difficulties in establishing and sustaining production of critical rare earth magnets in a market environment in which China controls much of the supply chain," the official said. The Pentagon investment in MP was undertaken via a Cold War-era law known as the Defense Production Act, as well as its Office of Strategic Capital, the official said.
Bloomberg
25-06-2025
- Business
- Bloomberg
Czech Defense Firm's $1.33 Billion Junk Sale to Cut Debt Costs
Armaments maker Czechoslovak Group AS is marketing $1.33 billion of junk bonds at a much lower yield than its last debt foray, highlighting the clamor for defense sector investment among credit money managers. The Czech company, a supplier to Ukraine in its war against Russia, set initial price talk of 7% to 7.25% on a $750 million dollar note and 5.75% to 6% on a €500 million ($580 million) euro bond. Both tranches are much larger than originally intended, suggesting that the company received strong indications of demand during investor calls this week.
The Independent
15-05-2025
- Business
- The Independent
NATO weighs a US demand to massively hike defense spending as some struggle to meet the current goal
NATO foreign ministers on Thursday debated an American demand to massively ramp up defense investment to 5% of gross domestic product over the next 7 years, as the U.S. focuses on security challenges outside of Europe. At talks in Antalya, Turkey, NATO Secretary-General Mark Rutte said that more investment and military equipment are needed to deal with the threat posed by Russia and terrorism, but also by China which has become the focus of U.S. concern. 'When it comes to the core defense spending, we need to do much, much more,' Rutte told reporters. He underlined that once the war in Ukraine is over, Russia could reconstitute its armed forces within 3-5 years. Secretary of State Marco Rubio underlined that 'the alliance is only as strong as its weakest link.' He insisted that the U.S. investment demand is about 'spending money on the capabilities that are needed for the threats of the 21st century.' The debate on defense spending is heating up ahead of a summit of U.S. President Donald Trump and his NATO counterparts in the Netherlands on June 24-25. It's a high-level gathering that will set the course for future European security, including that of Ukraine. In 2023, as Russia's full-scale war on Ukraine entered its second year, NATO leaders agreed to spend at least 2% of GDP on national defense budgets. So far, 22 of the 32 member countries have done so. The new spending plan under consideration is for all allies to aim for 3.5% of GDP on their defense budgets by 2032, plus an extra 1.5% on potentially defense-related things like infrastructure — roads, bridges, air- and sea ports. While the two figures add up to 5%, factoring in infrastructure and cybersecurity would change the basis on which NATO traditionally calculates defense spending. The seven-year time frame is also short by the alliance's usual standards. Rutte refused to confirm the numbers under consideration, but he acknowledged that it's important to include infrastructure in the equation, 'for example to make sure that bridges, yes, are there for you and me to drive our cars but also if necessary to make sure that the bridge will hold a tank. So all these expenditures have to be taken into account.' It's difficult to see how many members would reach a new 3.5% goal. Belgium, Canada, Croatia, Italy, Luxembourg, Montenegro, Portugal, Slovenia and Spain are not even spending 2% yet, although Spain does expect to reach that goal in 2025, a year past the deadline. The U.S. demand would require investment at an unprecedented scale, but Trump has cast doubt over whether the U.S. would defend allies that spend too little, and this remains an incentive to do more, even as European allies realize that they must match the threat posed by Russia. 'There is a lot at stake for us,' Lithuanian Foreign Minister Kęstutis Budrys said. He urged his NATO partners to meet the investment goals faster than the 2032 target "because we see the tempo and the speed, how Russia generates its forces now as we speak.' British Foreign Secretary David Lammy said his country should reach 2.5% by 2027, and then 3% by the next U.K. elections planned for 2029. 'It's hugely important that we recommit to Europe's defense and that we step up alongside our U.S. partners in this challenging geopolitical moment where there are so many precious across the world, and particularly in the Indo-Pacific,' he said. As an organization, NATO plays no direct security role in Asia, and it remains unclear what demands the Trump administration might make of the allies as it turns its attention to China. The last NATO security operation outside the Euro-Atlantic area, its 18-year stay in Afghanistan, ended in chaos. ___ Cook reported from Brussels, and Fraser from Ankara, Turkey.
Bloomberg
08-05-2025
- Business
- Bloomberg
Germany's Defense Minister Wants €50 Billion Fund, Rheinmetall CEO Says
German defense minister Boris Pistorius wants to earmark at least €50 billion ($56.5 billion) for special investments on top of a base annual military budget, Rheinmetall AG Chief Executive Officer Armin Papperger said. Papperger, who was speaking Thursday during an earnings call, said Pistorius had outlined the plans to him in a recent conversation. The CEO didn't provide additional details, and the German defense ministry declined to comment on Papperger's remarks.
