December 14, 2016 / 5:56 PM / 8 months ago

EU investment bank to fund defence research - EU summit draft

BRUSSELS (Reuters) - The European Investment Bank (EIB) should start funding defence research, European Union leaders will say on Thursday according to the latest version of a joint statement, a move that is part of a wider plan to boost the bloc's defence spending.

Plans to step up the EU military and defence role have long been circulating, but have been given new impetus by U.S. President-elect Donald Trump who questioned whether Washington should protect allies not spending enough on their own defence.

"The EIB should initiate appropriate steps with a view to supporting investments in defence research and development activities," said the draft leaders' statement, seen by Reuters.

The EIB, an bank owned by EU governments, has so far been prevented from investing in defence and has focussed instead on financing infrastructure projects in the EU.

The draft joint conclusions of the summit, still subject to changes, also urge the European Commission to create a European Defence Fund in the first six months of next year.

The fund should initially have a financial capability of 90 million euros (£75.5 million) until 2020, which could be boosted to 500 million euros a year from 2021, according to a Commission proposal unveiled earlier in November.

Reporting by Francesco Guarascio

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