(Bloomberg) -- The European Union should consider issuing joint debt to fund significant air-defense investments to better protect its airspace from possible Russian strikes, according to a new report from the Brussels-based think tank Bruegel.
The issue of air defense has taken on new urgency in recent months after several Iranian-made drones launched from Russia violated EU airspace, including one that crashed in Latvia earlier this month.
Germany launched the European Sky Shield Initiative in 2022 with the aim of making the continent less vulnerable to air strikes at a time of increasing geopolitical tension. But its funding path remains uncertain, particularly since Berlin remains strongly opposed to issuing joint EU debt, a stance it repeated after European Central Bank chief Mario Draghi’s recent report on EU competitiveness.
“The topic is a priority for Germany. They want this to fly,” Guntram Wolff, a senior fellow at Bruegel and the author of the report, said in an interview. Some 21 nations, including the UK and Turkey, have signed up to the initiative, but “now the more difficult part is to get them to spend money,” Wolff added.
Focusing on a specific issue, such as air defense, might help move the needle on persuading reluctant member states to accept the idea of joint EU debt, he added.
“Air defense is so important because it is extremely visible that it’s a European public good: What you provide in any individual country provides benefits its neighbors,” Wolff said.
Air-defense projects require a capital-intensive upfront investment. A single Patriot missile battery costs around $1 billion, and the Bruegel report estimates the bloc’s total investment would need reach into “the hundreds of billions.”
In August, the security level was raised at a NATO air base in Germany following suspected Russian drone activity.
Latvia and Romania both reported incidents involving Russian drones violating its air space in early September, a sign of increasing aerial threats posed to Moscow’s neighbors.
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