NATO warns: Ignoring defense investments is "foolish"
Western rating agencies, banks, and pension funds are acting "foolishly" by ignoring defense investments, NATO high-ranking official Adm. Rob Bauer told the Financial Times. He emphasized that increasing defense spending is essential given the growing threat of conflicts.
NATO representative: financial institutions act "foolishly" by disregarding defense 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 following Donald Trump's inauguration on January 20 will further increase the demand for additional defense investments in Europe.
The newspaper pointed out that even though investments in start-ups in the defense sector within NATO countries have quadrupled, many financial institutions still refuse to lend money to arms manufacturers, especially smaller ones. These companies are often responsible for producing key components needed to complete larger orders, which are delayed partly 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 defense yield high returns, and state grants will "provide enormous funds to spend in this sector" over the next twenty years.
The NATO representative also appealed to financial institutions to change their outdated ways of operating in face of these threats. 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 European Investment Bank to lift the near-total ban on investing in defense projects. However, Bauer asserted that it's not only this institution but other financial institutions that need to change their approach.
Defense is not a cost, it’s an investment, he emphasized.
