Romania will host the regional office of the Bank for Defense, Security, and Resilience (DSRB)

“Collective Defence Requires Collective Capital”

Alexandru Nazare, Romania’s Minister of Finance

Summary

The Romanian Ministry of Finance announced the country’s official participation as a founding member of the new Bank for Defense, Security, and Resilience (BASR / DSRB). The initiative, launched under Canada’s leadership at the NATO summit in Ankara, aims to bridge the gap between the Alliance’s growing defense commitments and the actual financial capacity needed to fulfill them. As a result of the negotiations, Bucharest will host the bank’s regional office for the Southern Flank.

Key Points and Strategic Importance

• A New Role in European Security: Its status as a co-founder and host of the regional office strengthens Romania’s strategic influence in the Black Sea region and on NATO’s eastern flank. The country will participate directly in decision-making and funding allocation mechanisms.
• Attracting capital for key sectors: Through the DSRB, Romania is opening up new sources of financing (loans, guarantees, equity investments) for its strategic projects and companies in the defense industry, critical infrastructure, energy, digitalization, and cybersecurity sectors. Small and medium-sized enterprises will also be a priority.
• Call for “collective capital”: Romanian Finance Minister Alexandru Nazare emphasizes that contemporary security is no longer just a matter of military planning but requires a strategic and predictable mobilization of capital. Public budgets alone cannot cover these needs, and commercial banks still avoid the defense sector due to regulatory and reputational risks.
• The context of record spending: The launch of DSRB coincides with a historic increase in allies’ defense budgets (which will exceed 3% of GDP for EU member states and Canada by 2026) and with the European Commission’s projections regarding the need for an additional 800 billion euros under the ReArm Europe/Readiness 2030 initiative.

Three main challenges that DSRB will address

Accessible capital for governments: Providing long-term, low-cost financing that does not place an undue burden on national budgets.

Optimized public procurement: Smarter and faster financing and administration of defense procurement.

Mobilizing the private sector: Providing state-backed guarantees to encourage commercial banks to extend credit to companies in the security sector’s supply chain.

Press release

Bucharest will host the Defense, Security and Resilience Bank (DSRB) regional office for the southern flank, following negotiations between the founding states. The decision strengthens Romania’s role in the new financial architecture dedicated to European security and regional resilience and offers our country a relevant position in the future development of the new international financial institution.

Advanced under Canadian leadership and launched on the margins of the NATO Summit in Ankara, the DSRB aims to address one of the Alliance’s most pressing challenges: bridging the gap between growing defence commitments and the financial capacity needed to deliver them.

Romania was among the first NATO Eastern Flank countries to join the initiative and has contributed to shaping the institution since its earliest stages. The Romanian Ministry of Finance has helped develop a governance model designed to attract international investors, support strategic industries and strengthen critical infrastructure, particularly in regions facing the greatest security challenges.

Through its founding state status, Romania will have access to a new international financial instrument and decision-making mechanisms through which funding will be directed towards projects relevant to regional security, critical infrastructure and the development of the defense industry.

“Romania does not enter this project as a simple participant, but as a founding state that contributed to the construction of the new institution from the very beginning. Romania’s security and allied security can no longer be viewed solely through the lens of military planning; they need predictable financing, intelligently mobilized capital, strategic infrastructure and an industry capable of delivering. Collective defense needs collective capital. Through the DSRB, we are opening a new source of financing for Romania’s strategic projects and for Romanian companies in high value-added areas – defense, critical infrastructure, energy, cybersecurity and emerging technologies. The fact that Bucharest will host the bank’s regional office represents a recognition of Romania’s role on the Black Sea and on the Eastern Flank and, at the same time, a concrete opportunity to transform this strategic positioning into projects, investments and economic development,” said Alexandru Nazare, Minister of Finance.

The launch comes amid historic increases in Allied defence spending. According to NATO’s 2025 Defence Expenditure Report, European Allies and Canada are expected to invest more than 3% of their combined GDP in defence this year, while total NATO defence expenditure is projected to exceed USD 1.5 trillion. At the same time, the European Commission estimates that Europe will require up to €800 billion in additional defence investment under the ReArm Europe/Readiness 2030 initiative, underscoring the need to mobilise private capital alongside public funding.

Why Collective Defence Requires Collective Capital

“For much of the past generation, Europe treated security primarily as a matter of military planning and diplomacy. Finance was considered a consequence of strategy rather than a strategic instrument in its own right. That era has come to an end,” said Alexandru Nazare, Romania’s Minister of Finance.

The return of war to Europe has demonstrated that ammunition production, resilient energy systems, cyber capabilities, secure ports and industrial supply chains all require capital before they become capable. Political commitments alone are not enough, the Minister added. 

According to Minister Nazare, while Allies are investing more in defence, financial markets have not adapted at the same pace. Commercial lenders continue to regard defence as a sector carrying regulatory and reputational risks, while many strategically important suppliers struggle to access financing.

“The result is a widening gap between strategic urgency and financial execution—one of the defining challenges facing Allied security today,” Minister Nazare said.

The Minister stresses that governments must continue increasing defence spending, but public budgets alone cannot meet future investment needs, particularly for countries facing the greatest security risks.

“Collective defence requires more than shared threat assessments and common military planning. It also requires financial instruments capable of transforming common purpose into common capacity,” Minister Nazare emphasized.

Romania Helped Shape the Institution from the Beginning

Romania joined the initiative from its earliest stages, actively contributing to the design of the institution alongside its founding partners.

The Ministry of Finance advocated for a governance framework built on strong capitalisation, prudent risk management, transparency and credibility with international investors and credit rating agencies.

Romania also argued that resilience has a strong regional dimension. The Black Sea region, South-Eastern Europe and NATO’s Eastern Flank are areas where strategic vulnerability, infrastructure and investment needs intersect most directly. For this reason, Romania supports establishing a regional presence that would allow the Bank to operate closer to the areas where resilience is most needed.

For Romania, the new bank opens up financing opportunities for strategic projects and for Romanian companies, in particular for small and medium-sized enterprises in the defense industry and related sectors. Depending on the financial instruments developed by the bank, they will be able to benefit from loans, guarantees and equity investments aimed at expanding production capacities, innovation, emerging technologies and integration into international supply chains

The DSRB will be able to support investments in critical infrastructure, transport, energy, digitalization, cybersecurity, emerging technologies and supply chains relevant to defense and resilience, contributing to strengthening the capacity of Member States to respond to current security challenges.

Defence Financing Is Now a Strategic Economic Priority

Minister Nazare underlined that defence financing is no longer solely the responsibility of defence ministries: “It has become equally a matter of fiscal policy, capital markets, industrial competitiveness and investment confidence.”

This shift is reflected in global investment trends. According to the Stockholm International Peace Research Institute (SIPRI), global military expenditure reached a record 2.72 trillion dollars in 2024, while the European Investment Bank has expanded its support for security and defence projects, recognising the growing financing needs of Europe’s defence industrial base.

Measuring Success by Results

Romania believes the DSRB’s credibility will depend not on the size of its balance sheet, but on measurable outcomes: expanding industrial production, strengthening supply chains, improving critical infrastructure and mobilising private investment.

“The Defence, Security and Resilience Bank will not solve every challenge facing Allied defence. What it can do is address one of the most important: the gap between the political decision to strengthen defence and the financial capacity to make that decision a reality,” said the Minister. “Romania is part of this effort because we believe that collective defence requires collective capital. Countries closest to today’s security challenges also have a responsibility to help shape the financial instruments that will strengthen Allied resilience.Deterrence begins with political resolve. It endures only when that resolve is backed by credible, sustainable and collective financing,” concluded Minister Alexandru Nazare.

Built for scale and backed by sovereigns, the DSRB Bank will address three critical challenges:

• Affordable capital for governments – Delivering long-term, low-cost financing without adding pressure to national balance sheets;
• Smarter, faster procurement – Supporting governments in streamlining and financing defence acquisitions;
• Unlocking private capital – Providing guarantees that enable commercial banks to fund defence and security firms across the supply chain.

Photo: Alexandru Nazare (source: Ministry of Public Finance (Romania))

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