Canada is aiming to announce roughly ten founding nations for a new multilateral defence bank at next week’s NATO summit in Ankara, a milestone that would move one of Prime Minister Mark Carney’s signature foreign-policy projects from proposal to institution. Isabelle Hudon, Canada’s lead negotiator on the effort and chief executive of the Business Development Bank of Canada, told Reuters that the July 7-8 summit had been set as the deadline for naming the founding members.
The institution, the Defence, Security and Resilience Bank, is designed to raise up to $133 billion in affordable financing for the militaries of allied states. The model borrows from development banks: member governments back the lender with capital and guarantees, and the bank uses that backing to borrow on financial markets at rates lower than many individual members could secure, then lends the proceeds for defence and security projects.
The founding roster, Hudon indicated, would likely be mostly European besides Canada, though she declined to name the members before the summit. The only partner confirmed publicly so far is Luxembourg, which is to become the bank’s European base. Italy, Spain, Turkey, Belgium and Ukraine have all examined the proposal, according to people familiar with the talks, though none has confirmed it will join as a founding member.
For Carney, the bank is the clearest expression yet of a doctrine he has pressed since taking office: that the US-led international order is fracturing, and that "middle powers" need to build their own institutions rather than wait for Washington. The Fold has followed the same argument through his security and defence pact with the European Union and a run of Arctic-defence agreements this spring, each of which positioned Canada as a convener of allies uneasy about relying on the United States.
The timing is deliberate. NATO members are under pressure to raise defence spending steeply, and the alliance has been debating targets that would push outlays well above the old 2 percent of GDP benchmark. A lending institution that lowers the cost of that spending is meant to make the higher targets politically survivable, particularly for smaller economies that would struggle to finance a rapid military build-out on their own balance sheets.
The obstacles are the ones that face any new multilateral lender. The bank’s borrowing power depends on the credit strength of its backers and the guarantees they are willing to post, and a founding announcement is a long way from members actually committing capital. Ankara will show whether Carney can convert months of quiet negotiation into a public list of names — and whether that list is long and creditworthy enough to make the $133 billion target more than an aspiration.