Home News European Defence Agency Comes Up with a Solution to the Financing Problem Encountered in Joint Projects

European Defence Agency Comes Up with a Solution to the Financing Problem Encountered in Joint Projects

by MSI

You can read the news published in the 78th Issue of MSI Turkish Defence Review here:

In defence projects carried out jointly by multiple countries, it is not always possible for each partner to fulfil its financial obligations in a timely manner. Countries may delay their financial contributions for various reasons, such as budget constraints, late budget allocations or payment priorities. When disruptions occur in the project calendar, payment dates also change, and this makes the situation even more complicated. As a solution to this problem, the European Defence Agency (EDA), all projects of which are carried out jointly by its members, has created a joint fund for use in such cases. The joint fund, known as the Cooperative Financial Mechanism (CFM), was established with the signing of a programme arrangement on 9 December by the EDA and the European Investment Bank (EIB).

Under the CFM, there will be two kinds of financing options. The first will take the form of loans from the EIB for projects that meet their eligibility criteria, with the details of the loan negotiated on a case-by-case basis. The second option will be the provision of loans by an EDA member to another EDA member through EIB accounts.

Talks regarding the establishment of the CFM have been continuing for the last three years. In the first stage, Belgium, Bulgaria, France, Greece, Greek Cypriot Administration, Hungary, Lithuania, the Netherlands, Portugal and Spain will join this mechanism. The number of EDA member countries involved in the mechanism based on voluntary participation is expected to increase in the near future.

Related Articles

This website uses cookies to improve your experience. We think you are familiar with this, but you can disable it if you want. Accept Read More