"Even New Startups Struggle to Open Bank Accounts"
The European Union (EU) is pushing for a major 'rearmament,' but defense contractors are facing difficulties in securing funding due to various regulations, Bloomberg reported on the 9th (local time).
Bloomberg reported that European defense companies in various fields, such as developing new drones and advanced security equipment, are struggling to raise funds, and that the regional financial environment is not keeping pace with the political situation driving rearmament.
Recently, as U.S. President Donald Trump continued his pro-Russian stance day after day, the EU unveiled the 'European Rearmament Plan' to strengthen its defense capabilities. In particular, it clearly expressed its intention to purchase European-made weapons when executing related budgets such as joint weapon financing loans.
In response, the European defense industry has criticized regulations that restrict loans to industries conflicting with ESG (Environmental, Social, and Governance) standards, saying these regulations are blocking funding. Patrick Schneider, a partner at Sikorsky NATO Innovation Fund (NIF), said, "I have witnessed countless cases where the political atmosphere for the revival of the defense industry has not yet been reflected in banks and other financial sectors."
Fabrizio Campelli, head of investment banking at Germany's largest bank, Deutsche Bank, also emphasized, "If there are no concrete measures regarding funding, Europe will face difficulties in the process of restructuring its defense industry," adding, "To make the defense industry more finance-friendly, the definition of sustainable finance must be simplified and standardized."
Bloomberg also reported that among defense companies, smaller firms such as startups are facing problems more than large companies that had established transaction records with financial institutions before ESG regulations were applied.
Florian Seibel, CEO of German drone company Quantum Systems, said, "Many defense companies are simply having difficulty even opening bank accounts," adding, "Transactions are blocked because they violate internal regulations." Jan Hendrik Wollens, CEO of drone interception technology developer AlphaIngle, also said, "We are still fighting with banks."
In this regard, the EU Commission plans to announce measures this month to simplify industrial regulations, including those in the defense sector. Earlier, the Commission also announced the 'Omnibus Package' last month to reduce the regulatory burden on companies regarding environmental friendliness and sustainability.
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