European Union officials are proposing an €850 billion [1] common borrowing mechanism to fund economic security and defence projects.

The proposal seeks to address the bloc's sluggish economy by creating a safe, liquid European asset. This financial instrument would allow the EU to mobilize significant capital for strategic priorities without relying solely on individual member state budgets.

Spain's Finance Minister Carlos Cuerpo said the EU should consider jointly borrowing to finance investment in economic security and defence. Cuerpo first raised the suggestion on March 12, 2026 [2]. The push for collective financing comes as the bloc navigates shifting security landscapes and internal economic pressures.

During a debate on Euronews' #TheRing, MEP Markus Ferber said the Union needs a common borrowing instrument that can mobilise €850 billion [1] for strategic priorities. The mechanism is intended to provide a stable financial foundation for large-scale investments that benefit the collective security of the member states.

ECB President Christine Lagarde supported the concept of a unified financial tool. Lagarde said it is pretty obvious the EU needs to have a European asset that the markets see as safe and liquid.

Despite the push from Spain and some MEPs, the proposal faces internal hurdles. While EU leaders generally agree that reforms are necessary, they remain divided on the specific methods of financing. Some member states have historically resisted joint debt, fearing it could lead to shared liability for national deficits.

The debate over joint borrowing coincides with broader discussions regarding military spending. Some related discussions have touched upon a NATO defence-spending target of 3.5% [3] of GDP, further highlighting the scale of investment required to meet current security goals.

“The EU should consider jointly borrowing to finance investment in economic security and defence.”

The proposal represents a significant shift toward fiscal integration within the EU, moving from temporary crisis response tools to a permanent strategic investment vehicle. By creating a 'safe asset,' the EU aims to lower borrowing costs and accelerate military modernization, though the success of the plan depends on whether fiscally conservative member states will accept the risks of joint debt.