PARIS, March 20 (Alliance News): France’s public investment bank, Bpifrance, is set to launch a €450 million ($490 million) defence-focused fund, Finance Minister Eric Lombard announced on Thursday.
This initiative is part of the country’s broader strategy to boost military spending in response to growing security threats from Russia and uncertainty over US protection.
Lombard stated that French citizens could invest in the fund in increments of €500, allowing public participation in long-term defence financing.
The move aligns with France’s leadership in European rearmament, particularly amid concerns of a potential Washington-Moscow rapprochement that could embolden Russia’s westward expansion.
Despite the push for higher military spending, budget constraints remain a challenge. European Central Bank (ECB) member Francois Villeroy de Galhau warned that while increasing defence expenditures is necessary, it must not be unlimited due to France’s high public deficit and debt.
He emphasized that defence buildup cannot follow the same “spend whatever it takes” approach used during the COVID-19 crisis.
The French defence sector is expected to require over €5 billion in additional equity capital over the next few years, according to both the finance and defence ministries.
President Emmanuel Macron, who has doubled France’s defence budget across his two terms, has now set a target to increase military spending to 3-3.5% of GDP, up from the current 2%.
