Mark Twain, the American writer, said you shouldn’t teach a pig to sing — it is a waste of your time and it annoys the pig.
That advice is becoming increasingly relevant for European governments.
Trying to make the present US administration understand the defence and security anxieties it has unleashed upon Europe would be a waste of time. It would probably only annoy President Donald Trump and risk provoking a characteristically erratic response.
It is therefore time for Europe to stand on its own two feet, detach from US protection and rearm.
This is an idea many European leaders have reluctantly been driven to countenance.
But the thought of a new multilateral institution being established to do the funding is more of a hot take.
Many bond market participants argue that, if borrowing is to be done through a joint funding vehicle, it should be through an existing institution.
The European Investment Bank, European Stability Mechanism and the European Union itself have ready-made investor bases and would undoubtedly borrow at cheaper rates than a new multilateral entity, even if it managed to get rated triple-A.
But all these issuers have problems in themselves — political, legal or practical — that would make it difficult for them to step up into the role of joint defence funding entity.
Defence policy remains to a great extent a national matter, even within the EU. National feelings run high on these issues, and a change of government can alter a country’s defence stance dramatically.
These conditions are not conducive to joint EU policy-making, which relies on stability and consensus.
Even the EU’s joint debt financing for Covid relief programmes was controversial for some member states, and any further joint borrowing would be even more so.
Add to that, some EU members such as Hungary like to appear friendly to the Kremlin and they have veto powers.
The EIB would arguably be the most effective institution from a market perspective. But funding defence risks tainting the ESG virtues the EIB has taken so much time to cultivate. Rightly or wrongly, green and socially minded investors would likely think twice about it issuing defence bonds.
And neither of these institutions includes Norway, Britain or Turkey —politically strategic and arguably necessary allies.
This problem is even more pronounced at the ESM, which only has a mandate to serve eurozone countries. A complete treaty change would be needed for it to be a solution to Europe’s defence financing gap.
These obstacles make a strong argument for creating a new borrower.
If the continent is to use a supranational institution to fund its security needs, it must be formed by a true ‘coalition of the willing’ and have a clear, fresh mandate, uncomplicated by past obligations.
It may be that no multilateral finance institution can materially help European countries borrow for defence. But a new one deserves serious consideration.