Deutsche Bank Proposes Common European Debt for Defense

The head of Deutsche Bank, Christian Sewing, has advocated for the issuance of common European debt to strengthen defense, drawing a parallel to the pandemic period when joint bond issuance proved effective. While generally cautious about common debt, he believes that European security and defense constitute an exceptional case justifying such a move, as strategic investments in this area are more efficient at a pan-European level. Sewing estimated that capital markets would be willing to finance these investments, emphasizing the need for common European action in other critical areas such as energy and artificial intelligence. This proposal comes at a time of heightened geopolitical tensions and a search for greater European autonomy in the field of defense. Furthermore, Sewing expressed the view that the EU's decision-making process needs to be modified, as the principle of unanimity often hinders progress on important issues. Eliminating or reducing the need for unanimity could accelerate decision-making and enhance the effectiveness of the EU. In summary, Deutsche Bank proposes a new approach to European defense and economic policy, supporting the assumption of common debt for strategic investments and the simplification of the decision-making process within the EU.