Russia's war in Ukraine is igniting an old debate in Brussels over debt

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To raise or not to raise new debt together? That's the question hanging over the shoulders of European officials as they promise to spend more on defense.

For many years, EU nations that were traditionally more conservative over how they spend their money did not want to tap capital markets together with the rest of the bloc.

French President Emmanuel Macron welcomes Ukraine's President Volodymyr Zelenskyy and German Chancellor Olaf Scholz for a meeting at the Elysee Palace in Paris, France, February 8, 2023.Munich, GERMANY — Should we borrow from global markets as one combined entity and raise new debt together? Instead, Lindner suggested that the EU should develop a single market for defense products, as well as promoting consolidation in the sector and pursuing the joint procurement of military goods.He said that in order to fund new defense spending "either you raise it at the national level or you raise through own resources, which has certain political and also structural disadvantages."

His remarks were seen as potentially meaning that the U.S. may no longer be a reliable partner in respecting NATO's Article 5 that says an attack on one member is an attack on all of them.

 

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