NATO criticizes banks for ignoring defence funding needs
Western rating agencies, banks, and pension funds are acting "foolishly" by ignoring defence investments, NATO's high-ranking official Admiral Rob Bauer told the "Financial Times". Increasing defence spending is a necessity in the face of the growing threat of conflicts, he emphasised.
NATO representative: financial institutions act "foolishly" by disregarding defence investments. - What happened to your business instinct? - Bauer rhetorically asked banks, pension funds, and other institutions.
This is about restoring the balance of power between the United States and China - said Bauer, chairman of NATO's Military Committee. - I don't think we're headed for global wars as such, but regional wars, which we are now witnessing, will be part of our near future - he added.
According to him, changes in the United States, where Donald Trump will take office in the White House after the inauguration on 20 January, will further increase the demand for additional defence investments in Europe.
The newspaper pointed out that even though the level of investments in start-ups in the defence sector within NATO countries has quadrupled, many financial institutions still refuse to lend money to arms manufacturers, especially smaller ones. At the same time, it is these companies that are often responsible for producing key components needed to complete larger orders, the implementation of which is delayed, among other reasons, due to a lack of bank support.
"Have you lost your mind?"
"What happened to your business instinct? Have you lost your mind?" - Bauer rhetorically asked banks, pension funds, and other institutions. He pointed out that investments in defence pay off with a surplus, and "over the next 20 years, there will be enormous funds to spend in this sector" due to state grants.
The NATO representative also appealed to financial institutions to change their outdated ways of operating in light of the threat. Some allied countries "receive a lower rating (creditworthiness assessment) because they are closer to Russia, closer to the threat," yet "one might think that NATO membership would be a source of benefits, not penalties," he noted.
Some EU countries are pushing the authorities of the European Investment Bank to lift the almost complete ban on investing in defence projects. However, it's not only this institution but other financial institutions that need to change their approach - Bauer evaluated.
- Defence is not a cost, it’s an investment - he emphasised.
