German industry groups urge Berlin to join defence bank initiative

German Industry Groups Push for Berlin’s Participation in Defence Bank

German Associations Advocate for Joining the Defence, Security and Resilience Bank

By Marc Jones and Maria Martinez

Industry Groups Unite in Call for Action

BERLIN, Oct 29 (Reuters) - German business and industry associations on Thursday urged the government to join the Canada-led Defence, Security and Resilience Bank (DSRB), saying membership was needed to close financing gaps for companies in the defence sector and protect their access to future projects.

Signatories to the Joint Statement

The joint statement was signed by groups including the German Security and Defence Industry Association (BDSV), aerospace association BDLI, the chamber of commerce DIHK, engineering association VDMA, savings banks group DSGV and the Startup Association.

About the Defence, Security and Resilience Bank (DSRB)

The proposed multilateral institution, backed by Canada, seven other NATO countries and Ukraine, would provide long-term, low-cost financing for defence, security and resilience projects.

Need for Sustainable Defence Financing

"The geostrategic threat situation urgently requires new answers and approaches: financing for the defence sector must be secured sustainably over the long term," said Elisabeth Hauschild, managing director of BDSV. 

Support for Small and Medium-Sized Enterprises

The associations said the bank could offer guarantees for commercial loans to small and medium-sized companies, including startups, as well as long-term loans, venture capital and equity financing for capacity expansion, innovation and critical raw materials.

Risk Buffer and Long-Term Support

"As a multilateral development bank, it provides the decisive risk buffer through guarantees and long-term financing instruments—particularly where established banks have so far been reluctant to support long-term contracts for the Mittelstand," Hauschild said. 

Challenges and International Support

The DSRB, which will be based in Canada, has faced challenges securing support from larger European nations. Reuters was first to report in September last year that Britain had declined to join the project.

Germany’s Position and Potential Consequences

Current Status of German Involvement

A spokesperson for the German finance ministry told Reuters on Monday that Germany was an observer in the negotiations on DSRB's charter and was reviewing open questions.

Urgency for Participation

Germany should participate in the bank's founding process and join the group of founding states as soon as possible, the business associations said.

Risks of Non-Participation

The groups warned that companies from member countries could receive preferential access to procurement projects financed by the DSRB under its planned charter rules. If Germany stayed outside the institution, its companies could be excluded from market opportunities or face a competitive disadvantage against rivals from member states, they added.  

(Reporting by Marc Jones and Maria Martinez; Editing by Kirsten Donovan)