(Bloomberg) -- Europe should use common fiscal instruments to improve its competitiveness as well as to ramp up the defense industry, according to Spanish Economy Minister Carlos Cuerpo.

“There is an important element when we talk about defense which is the EU defense industry and of course fostering European defense,” Cuerpo told Bloomberg TV in Ghent, Belgium. “There is not only the element of common issuance but also the use of EU institutions to finance these projects.”

Earlier this month, Estonian Prime Minister Kaja Kallas said that the European Union should work on a plan to issue €100 billion ($107.8 billion) in eurobonds to boost the continent’s defense industry. The idea of exploring joint borrowing to boost the continent’s security capabilities has also been backed by French President Emmanuel Macron and European Council President Charles Michel. 

Regarding Europe’s broader competitiveness, “it’s a no brainer” for Europe to develop common EU financing instruments that fund “public goods” linked to the green transition, digitalization and security, as well as defense, Cuerpo said, speaking ahead of a meeting of EU finance chiefs.

--With assistance from Jorge Valero and Max Ramsay.

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