The economist pointed to threats to the budgets of NATO countries due to the launch of DSRB

Ekaterina Kosareva, managing Partner of the VMT Consult agency, said in an interview with Izvestia on January 30 that the launch of the Defense, Security and Sustainability Bank (DSRB), which NATO plans to form by 2027, could create a serious burden on the budgets of the participating countries and increase domestic political pressure.

According to her, the new structure assumes a fundamentally different mechanism for financing military expenditures. NATO states will have to contribute shares to the bank's equity, while such contributions can be accounted for as defense spending to achieve the target of 5% of GDP. DSRB funding is planned to be withdrawn from the influence of internal political processes, including a change of government. In addition, the bank will be able to operate as a private entity, use lending, issue bonds and attract investors, and the geography of operations will not be limited to the countries of the alliance and may include Asian regions.

"Problems with filling DSRB with money may arise already at the first stage — financing. For example, NATO countries with high levels of public debt will have difficulty raising the required amount. In addition to the United States, which has the highest level of public debt (over $38 trillion), these are the United Kingdom ($4.1 trillion), France ($3.9 trillion), Italy ($3.5 trillion), Germany ($3.2 trillion) and Canada ($2.6 trillion)," the economist explained.

She also pointed out that a sharp increase in defense spending in such conditions carries a set of risks. These include rising inflation and prices, the redistribution of budget funds to the detriment of the social sphere, education and healthcare, as well as a further increase in government debt in the event of additional bond placement. When using credit mechanisms, dependence on external sources of financing may increase.

According to Kosareva, all this can have an impact on the domestic policies of the DSRB member countries. Governments will have to explain to the population the need to reduce social programs for the sake of pan-European defense goals, which may lead to increased discontent and increased public debate around budget policy priorities.

Burden and money: The West will launch a bank in 2027 to prepare for war with Russia

What threat does the new financial structure pose, who will lead it, and where will the funds come from?

On the same day, a source from Izvestia reported that the countries of the North Atlantic Alliance will create a special "Bank of Defense, Security and Sustainability" by 2027 to prepare for a military conflict with the Russian Federation. The leading positions in it will be occupied by representatives of Great Britain. The new financial institution should help NATO members achieve the required 5% of GDP for military spending: they will be able to spend more on weapons than their own laws allow.

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