- French citizens can invest in long-term: Lombardy
- France has been leading the European heavy initiative.
- The French government faces major challenges in collecting funds.
Paris: Finance Minister Eric Lombard said on Thursday that France’s public investment bank BPIFRANCE will launch a 450 million euro ($490 million) defense fund.
The fund will be part of the country’s efforts to increase military spending due to concerns about Russian attacks and doubts about the future of US protection.
“In the long run, French citizens will be able to invest at €500,” Lombard told TF1.
France has been leading the European heavy initiative, with signs of Washington-Moscow reconciliation heightening concerns that Russia might expand its influence westward.
But as France’s budget has expanded, the government faces major challenges in funding these defense ambitions.
Francois Villeroy de Galhau, a member of the European Central Bank (ECB), said on Thursday that while France needs to increase its defense spending, it cannot be unlimited given the country’s high public deficit and debt.
Villeroy, head of the French bank, told BFM TV: “We cannot set policies that spend on any expenditure on defense spending.” He stressed that when France deploys a large amount of financial resources to support the economy, defense accumulation cannot be achieved in the same way as emergency spending at the age of 19.
According to the Ministry of Finance and Defense, French companies in the Ministry of Defense will require more than €5 billion in additional equity capital in the next few years.
President Emmanuel Macron, who launched the French defense budget twice in two of his missions, recently set a higher goal, saying the country should increase defense spending from its current 2% to 3-3.5% of its economic output.
($1 = 0.9184 Euros)
