The European Union’s 27 member states gave initial approval to a €150 billion (RM721.29 billion) defence fund that will distribute money to countries looking to invest in security capabilities such as ammunition, drones and the protection of critical infrastructure, according to people familiar with the matter.

The fund is expected to receive formal approval next week, said one of the people, who spoke on the condition of anonymity.

The programme was proposed by the European Commission, the EU’s executive arm, in March as a response to President Donald Trump’s pullback of American security in Europe. The fund comes in addition to new rules that allow member states fiscal flexibility for spending on defence, which could mobilise a combined €800 billion.

The commission will raise the €150 billion in the capital markets and disburse the money as loans to member states upon request to finance specific products that the continent lacks the most, according to one of the people. These include missiles, ground capabilities and missile defence systems.

Some countries outside of the EU are eligible to participate in the programme, provided those expenditures don’t exceed 35% of the cost, the person said. The UK and EU reached a defence partnership on Monday and the bloc committed to explore ways to allow London access to the programme.

Source: Theedgemalaysia