By Maria Martinez ‌and Sabine Siebold

BERLIN, Dec 10 (Reuters) - Germany has turned down the idea of a new multilateral defence bank, dealing the latest blow to ‍duelling proposals to ‌create a global state-backed lender to help rearm European and NATO member countries.

Berlin's finance ministry told Reuters on Wednesday that the German government ⁠rejects the creation of further financing instruments for the armaments sector. It ‌added that neither the concept of a global Defence, Security and Resilience Bank nor that of a European Rearmament Bank are currently being discussed in EU or NATO bodies and no process is underway to discuss possible state participation.

"Strengthening defence capabilities is a new priority for the German government," a German finance ministry spokesperson told Reuters. "(However) the German ⁠government's focus is on the rapid implementation of existing instruments, in line with the capability requirements of the member states."

The spokesperson added that financing should be achieved through the EU's newly ​created Security Action for Europe (SAFE) scheme, which provides member states with loans of up to 150 ‌billion euros ($175 billion) for joint procurement.

The two competing proposals for a ⁠new multilateral institution to help raise funds for rearmament have been courting governments and banks for support. Both the ERB and the DSRB aim to create an institution with a triple-A credit rating - the highest - to rapidly mobilize capital for European defence procurement, but differ on proposed membership ​and lending terms.

An ERB spokesperson said that a multilateral defence bank would provide greater firepower towards Europe's rearmament than the region's existing initiatives, adding that a multilateral bank would "incentivise capacity expansion, reduce parochialism and get more bang for the defence buck."

A spokesperson for the DSRB declined to comment. There are no discussions ongoing at NATO on possible state participation in defence banks, a NATO official told Reuters.

Rob Murray, CEO of the DSRB's development group, ​has previously said ‍that the DSRB multilateral initiative would be complementary ​to SAFE and would boost the region's defence-industrial base by directly lending to firms. Its aim is to become a global state-backed bank with a triple-A credit rating capable of raising 100 billion pounds ($133 billion) to fund defence projects.

The ERB has invited European NATO countries to be shareholders and is hoping to generate up to 250 billion euros of lending in capital markets by leveraging about 10 billion euros from member shareholders, paid in over three years, according to a memo from the ERB shared with Reuters previously. It has written to the DSRB in the hope of joining forces to avoid competing.

Germany's ⁠scotching of the DSRB proposal, however, is the second major blow for the idea in a matter of months after Britain's government also distanced itself from the DSRB in September.

"Germany can refinance itself on the markets ​at the best terms and would not have any financing advantages by borrowing through a multilateral bank," a German defence ministry spokesperson said in a separate statement to Reuters Tuesday. 

Deutsche Bank(DBKGn.DE), JPMorgan (JPM.N), Commerzbank (CBKG.DE), and ING (INGA.AS) are among half a dozen banks that support DSRB, according to the multilateral lender's website.

Pressure remains firmly on Europe to increase its defence capabilities, however.

Pentagon officials told diplomats in Washington last week that ‌the United States wants Europe to take over the majority of NATO's conventional defence capabilities, from intelligence to missiles, by 2027.        

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(Reporting by Maria Martinez and Sabine Siebold in Berlin, additional reporting by Iain Withers, Andrew Gray and Marc Jones; editing by Anousha Sakoui, Elisa Martinuzzi and Toby Chopra)