France’s state investment bank Bpifrance will launch a defense fund worth EUR 450 million.

Finance Minister Eric Lombard announced this.

French defense companies need more than five billion euros of additional equity capital over the next few years.

The fund will be part of the country’s efforts to increase military spending due to doubts about future protection from the United States.

“French citizens will be able to invest their money in tranches of EUR 500 in the long term,” Lombard said.

France is leading European rearmament initiatives after signs of a potential rapprochement between Washington and Moscow, which has heightened fears that Russia could expand its influence in the West.

However, with French budgets already stretched, the government faces serious challenges in financing these defense ambitions.

European Central Bank member François Villeroy de Galleau stated that while it is necessary to increase defense spending in France, it cannot be unlimited, given the country’s high public deficit and debt.

According to the finance and defense ministries, French defense companies need more than EUR five billion in additional equity capital over the next few years.

President Emmanuel Macron, who initiated the doubling of France’s defense budget during his two mandates, recently set an even higher goal, saying that the country should increase defense spending to 3-3.5% of output from the current 2%.

In 2024, the French military budget amounted to EUR 56.6 billion.

The French defense industry currently produces a wide range of military equipment, including aircraft, tanks, ships, submarines, missiles, artillery systems, communications, electronic warfare, and cybersecurity.