ESM Could Fund Defense, Says Head

The European Stability Mechanism (ESM), established to tackle the eurozone crisis with over €430 billion ($514 billion), could finance defense spending for member countries, ESM chief Pierre Gramegna told Reuters as the EU seeks to bolster its military capabilities. Gramegna noted the ESM could offer defense-related credit lines without demanding strict economic reforms—partly to reduce stigma associated with tapping the eurozone’s emergency fund. ‘In these periods of geopolitical turbulence—driving higher defense and security expenditures across all countries—we must fully harness the ESM’s potential,’ he said. He highlighted credit limits for defense in economically sound but budget-constrained eurozone nations, especially smaller ones. ‘We have the tools,’ he added. ‘It’s in Europe’s interest… to fully deploy this capacity.’ Gramegna also pointed to increasingly strained transatlantic relations.