NATO Turns to Private Funding for Defence

NATO has launched a new initiative aimed at channelling private capital into the defence and security sector, as the alliance seeks to supplement strained national budgets with commercial funding amid increasing US pressure for member states to raise defence spending targets. The initiative, named ‘Call to Action’, was announced at the first NATO Defence Industry Forum during a summit in Ankara. It urges commercial financial institutions to increase lending and equity investments in military and security production. Speaking at the forum, NATO Secretary General Mark Rutte said demand for military capabilities continues to rise, adding that the alliance needs more capital to scale up the defence industry and fund innovation. Rutte stated that while private funding for the sector is increasing, it remains far from sufficient. The push reflects a broader NATO effort to shift more of the financing burden for military production to commercial markets through public-private investment models, he added. Under the initiative, NATO allies are expected to facilitate domestic financing mechanisms to support the transition. Major Western financial institutions, including Barclays, Citi, and Deutsche Bank, are participating in the framework. NATO revealed that the associated financial institutions have already raised $217 billion for security-related investments. The drive to increase private sector funding comes as NATO seeks to rebuild its military stockpiles and boost weapons production amid growing US pressure for member states to raise defence spending targets from 2% to 5% of gross domestic product. Facing budget constraints, European countries are increasingly relying on commercial markets to fund military expansion.