France Plans €450M Defence Fund Amid Security Concerns

France's public investment bank Bpifrance is set to launch a €450 million ($490 million) fund aimed at enhancing the country’s defense capabilities, as announced by Finance Minister Eric Lombard. This initiative comes amidst rising fears of a potential Russian attack and uncertainty regarding U.S. support, prompting France to lead European rearmament efforts. French citizens will be able to invest in the fund with contributions starting at €500. Despite the push for increased military spending, which President Emmanuel Macron aims to elevate to 3-3.5% of GDP, challenges persist due to France's already high public deficit and debt. ECB member Francois Villeroy de Galhau emphasized the importance of disciplined spending in defense, highlighting that it cannot mirror the extensive fiscal measures taken during the COVID-19 pandemic. Additionally, the defense sector is projected to require over €5 billion in equity capital in the coming years to meet its needs.