Why France and Italy are sparring over the EU’s loans-for-arms scheme
The EU is set to impose higher tariffs on Ukrainian imports, potentially damaging Ukraine's economy during its ongoing war with Russia. Meanwhile, internal EU tensions are mounting over a €150bn defence loan scheme aimed at boosting military capabilities in response to Russian threats and potential U.S. withdrawal from NATO under Donald Trump. France is pushing for strict limits on non-EU involvement in the scheme, clashing with countries like Germany, Italy, and Poland, whose defence industries rely on partnerships with non-EU firms. Poland, currently holding the EU Council presidency, aims to broker a compromise soon. Simultaneously, NATO foreign ministers are meeting in Turkey amid pressure from Trump for member nations to boost defence spending to 5% of GDP, far above the current 2% target, with debates ongoing about how to calculate and justify this increase.