The EBRD: A Forgotten Instrument of European Defense

In the context of current geopolitical and economic challenges, the European Bank for Reconstruction and Development (EBRD) could play a decisive role in financing the European defense effort.

Created in the early 1990s to help Central and Eastern European countries readjust to the global market after the fall of the Berlin Wall, the EBRD contributed to these nations’ economic transition. Today, as Europe faces multiple crises, particularly in defense matters, this long-neglected instrument could once again prove crucial.

A Forgotten but Relevant Tool

The EBRD, often overlooked outside specialized economic circles, nevertheless played a major role after the end of the Cold War. Its initial objective was to help former Soviet bloc countries reintegrate into the global market by providing financing and advice for infrastructure projects, privatization, and economic reforms. Thanks to it, nations such as Poland, Hungary, and the Czech Republic were able to successfully transition economically, adapting to the demands of the European market.

But today, as these countries have stabilized economically, it is legitimate to wonder whether the EBRD could be repurposed to address more pressing contemporary challenges, such as European defense. Although everyone knows that the EBRD exists, its relevance and potential have been largely overlooked in current political discourse. It is in this context that I propose a reassessment of this tool.

The Response to the European Defense Crisis

The European Union finds itself at a strategic crossroads, where the issue of defense is more important than ever. If the American security umbrella seems increasingly unreliable, it is becoming crucial for Europe to develop an autonomous defense capability. This requires massive investments in weapons, technology, and military infrastructure, areas where the EBRD could intervene.

The idea of ​​using EBRD funds to finance European defense projects could offer several advantages. First, it would allow resources to be concentrated where they are needed, rather than dispersed. Rather than seeking external financing, the EU could mobilize existing capital, thus avoiding further economic collapse.

Second, this strategy would be consistent with the idea of ​​strengthening European independence. In a context where NATO and the Atlantic Alliance are perceived by some as fragile, it is imperative that Europe take responsibility for its own security. Purchasing exclusively European weapons with EBRD funds would not only strengthen the EU’s military capabilities, but also the European defense industry, creating jobs and consolidating cutting-edge technologies on European soil.

Rebuilding Credibility

Using the EBRD to finance European defense represents a challenge in terms of political credibility. In a context where the war in Ukraine has exacerbated geopolitical tensions, it is essential that Europe demonstrate its ability to act autonomously. The principle of European solidarity, reinforced by a joint defense effort financed by a financing organization like the EBRD, would send a strong message of cohesion to the United States, its Russian neighbors, and to European citizens themselves.

Furthermore, EBRD financing of European defense would allow for direct European control over the funds, thus avoiding dependency on non-European countries. The idea is simple: if Europe wants a credible defense, it must first take control of its financing, and the EBRD, as a development bank, is a legitimate tool for carrying out this task.

In conclusion, the EBRD is not just a relic of post-Soviet history. It represents a strategic lever that the European Union could use to strengthen its security and sovereignty in the face of growing external threats. Europe must respond pragmatically and prepare to assume its defense responsibilities. Mobilizing EBRD resources to finance a European defense effort, while supporting the defense industry on the continent, could well be the key to a stronger, more independent, and more credible Europe on the international stage.

©2025 – IMPACT EUROPEAN

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Jean-Luc GINDER Economiste

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