Deutsche Bank chief executive Christian Sewing has called for state-backed guarantees for bank loans to arms companies, arguing that public funds should be efficiently combined with private capital to finance an expansion of industrial capacity in defence.
In a guest commentary on Monday for the German business newspaper Handelsblatt, Sewing wrote that banks and investors are ready to support the defence sector, noting that Deutsche Bank’s loan portfolio in the arms industry totals “a mid-double-digit billion euro amount.”
To better address the sector’s needs, Deutsche Bank has created a specialized team for small and medium-sized enterprises in the defence industry.
But Sewing believes the financing capacity of banks could be used more effectively if combined with public sector guarantees or similar instruments when appropriate.
Sewing highlighted the success of the European Investment Bank (EIB) in mobilizing significant investments during the coronavirus pandemic through the use of guarantees.
He called for similar mechanisms to be applied to the defence sector, adding that ideas being floated – such as a proposed EU Defence, Security and Resilience Bank – are promising.
Global military rose for the 10th consecutive year in 2024, with total expenditures reaching around $2.72 trillion, according to the Stockholm Peace Research Institute (SIPRI) report on Monday.
Germany’s defence spending alone increased by 28%, totalling $88.5 billion last year.
Source: dpa.com
