Olli Rehn suggests Europe should pool defense investments - Reuters
Investing.com -- European Central Bank policymaker Olli Rehn has proposed that Europe should pool its defense investments to reduce costs and create a new safe financial asset that could strengthen the euro’s international role.
Rehn, who serves as Finland’s central bank governor, told Reuters that "Defence is also an opportunity for creating another safe asset that could bolster Europe’s financial architecture."
He added, "If we deem that common defence spending is a public good, then we also need common solutions."
While acknowledging that such spending would add to already high national debt levels, Rehn suggested that the European Union could potentially establish a defense development bank to own some of the assets, which would prevent them from burdening national balance sheets.
Rehn expressed optimism about progress on European financial integration, citing recent developments from Germany.
"I am encouraged by recent movements. The German decision to massively increase defence and infrastructure spending is pivotal," he told Reuters.
The Finnish central banker also noted that NATO countries’ decisions to increase defense spending would provide "an important fiscal stimulus and increase growth."
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