The United Kingdom, the Netherlands, and Finland—along with several other nations—are discussing the creation of a new financial body to support long-term, collaborative defense projects. This proposed institution would resemble the European Investment Bank in structure but would be dedicated specifically to defense-related initiatives.
According to the Dutch Ministry of Finance, participating countries would contribute capital that could serve as a guarantee for issuing bonds to investors. The U.K. Treasury indicated that NATO allies involved in the discussions are aiming to have this framework in place by 2027.
This initiative is intended to work alongside existing efforts by NATO and the European Union rather than replace them. For example, the EU’s €150 billion Security Action for Europe loan program excludes non-EU countries such as the U.K. and Turkey, while organizations like NATO’s procurement agency and OCCAR facilitate joint purchasing but do not raise funds through capital markets.
Dutch officials described the proposed mechanism as essentially functioning like a bank. With both paid-in and pledged capital, it could issue bonds to attract investment and use those funds to support joint defense projects, procurement processes, and tenders. Although still in the planning stages, the goal is to enable more effective cooperation through multi-year projects, strengthen defense industries, and promote joint procurement.
If established, this institution could reduce dependence on national defense budgets, introduce defense bonds as a new investment category, and bypass some of the challenges associated with achieving EU-wide agreement on defense funding.
Finland’s Ministry of Finance emphasized that Europe faces a substantial gap between current defense spending and NATO targets, requiring a variety of financial tools to address it. The proposed mechanism would complement existing EU and NATO programs while linking funding directly to joint procurement, helping to speed up collaboration and deliver cost efficiencies—even involving non-EU partners like the U.K.
The initiative would also create a unified platform for cooperation between finance and defense ministries. Additionally, it could support areas of the defense supply chain that struggle to secure funding, such as small and medium-sized enterprises, and provide sustained assistance to Ukraine.
Finland confirmed it is actively engaged in early discussions, noting that formal participation will depend on national-level political decisions. Defense Minister Antti Häkkänen highlighted that early involvement would allow Finland to help shape the structure of the mechanism.
Dutch Finance Minister Eelco Heinen stated that the initiative is open to like-minded Western partners both within and outside the EU, emphasizing that greater collaboration can enhance security while making more efficient use of resources.
The model is designed to generate returns that would be reinvested into the institution, thereby increasing its capital base and lending capacity over time. Similar in operation to institutions like the European Investment Bank or the European Bank for Reconstruction and Development, it would focus specifically on defense.
The Netherlands has also extended an open invitation to other Western allies to participate in developing and joining this multilateral defense financing effort.
