The European Investment Bank’s Emerging Role in Europe’s Defence Push
The EIB’s growing role in defence points to a wider shift in EU financing priorities towards security and preparedness, even as its exposure remains limited. A commentary by Rosalba Famà, and Francesco Moro
Defence has become one of the European Union’s strategic priorities. Translating national, EU and NATO spending commitments into actual capabilities, however, is easier said than done. The EU budget and member states’ public finances are already under pressure following successive health, energy and geopolitical crises.
Against this background, the European Investment Bank (EIB), with its ability to mobilise public and private capital, has been called upon to help unlock further investment in defence. The White Paper for European Defence: Readiness 2030 places the Bank among the institutions expected to support Europe’s defence effort. This raises questions about how the EIB’s constitutional and statutory mission is evolving.
This commentary examines the gradual shift in the Bank’s investment strategy and offers an initial assessment of its scale. It argues that the EIB’s evolution is part of a broader shift in the EU’s financial architecture away from cohesion and towards resilience and preparedness.
From cohesion to defence
Established by the Treaty of Rome in 1957, the EIB is a central, if often overlooked, actor in the implementation of long-term EU policies. As the Union’s lending arm, it helps translate policy priorities into investment projects.
Under Article 309 of the Treaty on the Functioning of the European Union, the Bank’s task is to contribute to the balanced and steady development of the internal market. Regional convergence is an important part of that mission. Protocol No. 28 also states that the EIB should continue to devote the majority of its resources to economic, social and territorial cohesion.
The Bank’s growing involvement in the Readiness 2030 framework therefore represents a significant change. Until recently, its support for defence-related projects was constrained by rules requiring a substantial civilian component. The shift has taken place gradually.
In May 2024, under its Security and Defence Industry Action Plan, the EIB removed the requirement that eligible dual-use projects derive more than 50% of their expected revenues from civilian applications. Projects still needed to serve civilian as well as military or security purposes.
The EIB Group’s 2024-2027 strategic roadmap subsequently identified security and defence as one of its eight priorities. In March 2025, the Board of Directors broadened the eligibility criteria further and established security and defence as a permanent, cross-cutting public policy goal.
The Bank can now finance a wider range of projects, including dedicated military infrastructure and equipment. Weapons and ammunition, however, remain excluded from EIB Group financing.
How much is the EIB financing?
Figure 1 shows an increase in cumulative financing for the defence and security projects identified in our dataset. The increase becomes steeper after 2024, alongside the changes in the Bank’s lending rules.
Table 1 and Figure 2 indicate that the projects identified in our dataset accounted for 3.17% of the Bank’s total financing in 2025. This should be treated as a lower-bound estimate, since the dataset includes only the projects featured on the EIB’s security and defence webpage.
The estimate is not directly comparable with the EIB Group’s official reporting. The Group, which includes the European Investment Fund, reports €4.4 billion in security and defence financing in 2025, equivalent to around 5% of its financing inside the EU. The two figures cover different sets of operations and use different denominators.
The findings have two implications.
First, the EIB appears to be entering a new policy area while continuing to operate within its traditional mandate to support the balanced development of the internal market.
Second, the effects of this change are likely to emerge gradually. European security and defence have suffered from decades of underinvestment, and it will take time for additional financing to translate into industrial capacity. As the first projects strengthen the European Defence Technological and Industrial Base, later investments could build on those capabilities and have a greater effect on the sector.
Beyond financing
The EIB’s involvement also matters because Europe needs higher defence investment at a time when public finances are constrained.
At the 2025 NATO summit in The Hague, allies committed to spending 5% of GDP annually on defence and related security needs by 2035. The commitment comprises at least 3.5% of GDP for core defence requirements and up to 1.5% for broader defence and security-related investment, including infrastructure and resilience.
European defence industries also remain fragmented along national lines. Limited interoperability and fragmented procurement reduce the benefits that firms could otherwise draw from the single market, constraining innovation and growth. The Letta report cites an estimate that the cost of fragmentation in European defence markets exceeds €100 billion a year.
The EIB’s contribution extends beyond its own financing operations. Its strengthened partnership with the European Defence Agency aims to identify financing needs for collaborative projects and improve coordination around procurement and industrial capabilities.
The European Investment Fund, part of the EIB Group, is also working with the NATO Innovation Fund to encourage private investment in defence and security technologies, including support for start-ups and smaller companies.
The Bank’s participation in Readiness 2030 is therefore more than an attempt to address a financing gap. It can also contribute to reshaping Europe’s defence industrial base, in line with the competitiveness agenda set out in the reports by Mario Draghi and Enrico Letta.
Europe’s security crisis is changing the demands placed on EU institutions. The EIB’s move into defence reflects a wider debate over the balance between the Union’s long-standing cohesion objectives and its growing need for resilience and preparedness.
These findings are the result of a project funded by a grant under the European Investment Bank’s STAREBEI programme.
Any errors remain those of the authors. The findings, interpretations and conclusions are entirely those of the authors and should not be attributed in any manner to the European Investment Bank.
IEP Bocconi does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
