Hereditary Grand Duke Guillaume visited the European Stability Mechanism (ESM) in Kirchberg on Wednesday, gaining insights into the institution’s role in safeguarding Eurozone countries’ financial stability. The visit comes as rising defence expenditures strain national budgets across Europe.
Prime Minister Luc Frieden recently announced a €400 million increase in Luxembourg’s defence budget by year-end during his State of the Nation address. Notably, part of this funding will originate from a dedicated state loan – an approach praised by ESM Director General Pierre Gramegna.
The European Commission has allocated €150 billion for defence investments. While the ESM could provide additional support if needed, Gramegna dismissed the possibility of Eurobonds modelled after Luxembourg’s loan mechanism, citing insufficient consensus among Eurozone members.
