German finance minister to urge EU to ‘Buy European’, embrace joint defence projects

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By Maria Martinez and Christian Kraemer

BERLIN (Reuters) -German Finance Minister Lars Klingbeil will call on Wednesday for a more “modern” EU budget that channels funds into improving cross-border rail and road links, energy networks, external border security and research, sources told Reuters.

Klingbeil will press a six-point plan to reboot the European Union’s economy, including a “Buy European” approach on critical components such as advanced semiconductors as well as a single market for defence, with joint armaments projects, they said.

Under Chancellor Friedrich Merz, Germany, Europe’s biggest economy, wants to take on a bigger leadership role in the EU as it deals with a less transatlantic-minded United States and the war in Ukraine, now in its fourth year.

In his speech at the Hertie School in Berlin, Klingbeil will press for swift trade deals with partners including India and South America’s Mercosur bloc in response to the Trump administration’s tariff policies, the sources said.

He will call for a “Savings and Investment Union” to mobilise more private capital, arguing that a harmonised and high-performing European capital market is essential to help start-ups and scale-ups grow, according to the sources.

Klingbeil will say that national go-it-alone approaches in implementing the EU’s single market rules are increasing bureaucracy and fragmenting the common economic space shared by the 27 member states.

He will also call for better mutual recognition of professional qualifications across borders to encourage labour mobility, identifying “small-state particularism” as a major drag on investment.

(Reporting by Maria Martinez and Christian KraemerEditing by Gareth Jones)