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Europe must spend on defence but few can afford debt rise, Villeroy says
Published by Global Banking & Finance Review®
Posted on March 27, 2025
1 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on March 27, 2025
1 min readLast updated: January 24, 2026
Europe must increase defence spending but manage debt levels. Few countries, except Germany, can afford higher debt, necessitating fiscal consolidation.
BRUSSELS (Reuters) - Europe needs to increase spending on defence but few countries other than Germany can afford to significantly boost their debt levels, so they must consolidate expenditure, French central bank chief Francois Villeroy de Galhau said on Thursday.
"We need fiscal consolidation... we need debt stabilization," Villeroy told a conference about his native France. "We need to bring the deficit back to 3%."
Villeroy noted that the expected boost in defence expenditure has already increased long term borrowing costs across the euro zone, but these interest rates are still below those paid by the United States.
(Reporting by Balazs Koranyi)
The article discusses Europe's need to increase defence spending while managing debt levels, as highlighted by Francois Villeroy.
Fiscal consolidation is necessary to stabilize debt levels and ensure sustainable economic growth in Europe.
Germany is one of the few countries in Europe that can afford to significantly increase its debt levels for defence spending.
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