NATO members to explore new defence funding mechanism

Three NATO members will explore setting up a new funding mechanism by 2027 to drive joint procurement, accelerate defence investment and increase the availability of critical capabilities, such as munitions.  

In a joint statement, released on 17 March, Finland, the Netherlands, and the UK said that they will work with partners and existing international institutions, while complementing NATO and EU initiatives to strengthen collective deterrence.  

At its core, the mechanism will use “joint financing” to deliver on the stated goals.  

“The mechanism offers a new way of defence cooperation with European partners, and is open to like-minded Western partners, both inside and outside the EU,” the Finance Minister of the Netherlands, Eelco Heinen, said.

Along with this latest initiative, there have been several European defence finance initiatives announced recently.  

The European Investment Fund stated on 4 March that it plans to invest EUR50 million in the defence, security and space sectors. The UK and Canada are also in talks to access the EU’s Security Action for Europe (SAFE) defence fund, worth EUR150 billion.  

“It’s in our long-term interests to strengthen our defence industries, make it easier for our armed forces to work together, and make sure taxpayers get value for money,” the UK Chancellor of the Exchequer, Rachel Reeves, said.