ECB to discuss defence spending support in the future, Holzmann says

By Yoruk Bahceli and Marc Jones

LONDON (Reuters) - The European Central Bank will have a discussion at some point in the future about whether it can play a role in the bloc's plans to ramp up defence spending, policymaker Robert Holzmann said on Thursday.

The European Union is planning a joint push to raise defence spending by 800 billion euros ($867.84 billion) as it seeks to protect the region and support Ukraine amid signals from the United States that Washington plans to dial down its military backing.

Asked whether he saw a role for the ECB to finance defence spending through bond purchases, Holzmann told an event in London: "we have not discussed it yet, we alluded to it."

Responding to a follow-up question on when a discussion may happen, Austria's central bank head said it would take place in "future", without specifying a time frame.

The ECB has used various bond buying programmes since the peak of the euro zone debt crisis and during the COVID-19 pandemic to help keep government borrowing costs in check.

ECB President Christine Lagarde recently played down the likelihood the bank would play a direct role in the financing effort, saying this was not the purpose of the ECB.

Germany's parliament has also approved a massive spending plan including easing constitutionally enshrined borrowing rules to rapidly raise defence spending. The anticipated surge in borrowing has sent European government borrowing costs sharply higher this month.

($1 = 0.9218 euros)

(Reporting by Yoruk Bahceli and Marc Jones; Editing by Frances Kerry)