Member states are seeking to use the structure to bypass legal constraints on military spending, Izvestia reports
A group of NATO countries is working to set up a new bank by 2027 to help fund military spending and prepare for a potential conflict with Russia, Izvestia reports, citing sources.
Western officials and media outlets have speculated that Russia could be in a position to attack NATO within several years, with the bloc’s chief, Mark Rutte, designating the country as an “enemy.” Moscow has dismissed claims that it plans to attack NATO states as “nonsense.”
Amid the stand-off over Ukraine, European NATO members have embarked on a military buildup, with US President Donald Trump also pushing member states to take more responsibility for defense and raise spending to 5% of GDP.
Izevstia reported that the Defense, Security and Resilience Bank (DSRB) would be designed to help countries reach the 5% threshold by counting paid-in capital toward the target and by using private funding, lending, and bond mechanics. According to the paper and the DSRB website, the framework would allow some national budget limits to be sidestepped and make the defense sector more attractive for private investment.
The paper’s sources said the bank’s backers aim to finalize its charter in the first quarter of 2026, with an inaugural bond issue expected in the third or fourth quarter of 2026, and a full launch in 2027.
The report said the project would be spearheaded by British officials and aims to fundraise as much as $135 billion, with Ottawa and Toronto mulled as potential locations for the headquarters.
Another facet of the framework is that it provides an incentive for centralized procurement of standardized weapons, the article said.
The framework is also supported by banks such as ING, JPMorgan, Commerzbank, Landesbank Baden-Württemberg, and RBC Capital Markets.
Izvestia added that, given what it called NATO leaders’ “aggressive” rhetoric, the structure would likely end up “funding offense rather than defense.”
However, not all NATO members are on board with the plan. In December, the German Finance Ministry rejected the idea of creating new defense financing mechanisms, saying it would like to focus “on the rapid implementation of existing instruments.” According to Izvestia, France and several Eastern European nations are prioritizing their own frameworks.
Read the full article here