Speaking to Bloomberg, Kallas said: "We are in a place where we need to invest more and [explore] what we can do together, as the bonds that would be issued by separate countries individually are too small to scale. Eurobonds could have a much bigger impact."

As reported by ERR News, while attending the weekend's Munich Security Conference, the prime minister called for more military aid to Ukraine from European nations.

Bloomberg reports that Kallas' Eurobonds idea has also found support from President Emmanuel Macron of France, and from European Council President Charles Michel.

Earlier on at the Munich conference, European Commissioner for Finance Johannes Hahn said that the EU could be able to produce up to 2 million artillery rounds for Ukraine per annum, from 2025. A pledge to provide one million large caliber shells to Ukraine is ongoing though will not meet its original deadline of Mach.

Czech President Petr Pavel also said that his country had located 800,000 artillery shells in stockpiles around the world which he said could be sent to Ukraine in the coming weeks.

Europe's defense capability and support for Ukraine were the main topics of the Munich Security Conference, which ended on Sunday. While the EU was able to agree on a €50-billion aid package for Ukraine at the beginning of this month, a US foreign aid package, including US$60 billion for Ukraine, is stuck in Congress, though President Joe Biden has said he is "confident" approval will be found.

Estonia has also called on its allies to fulfill their earlier promise and spend 0.25 percent of GDP per annum for the next four years.

It is argued that this would prove sufficient to tip the current deadlock in favor of Ukraine, coming up to the second anniversary of the full-scale Russian invasion beginning.

Within the Eurozone itself, Euorobonds or stability bonds are proposed government bonds which would be issued in euros, and jointly by the European Union's 19 Eurozone states, and was first suggested over a decade ago during the sovereign debt crisis.

In June 2012, German chancellor Angela Merkel firmly rejected any German support for Eurobonds, but since then the concept has arisen several times, including during the coronavirus pandemic.

One sticking point is that EU Eurobonds could possibly contravene Article 125, which would then to be changed prior to their introduction.

Article 125 of the Lisbon Treaty states explicitly that the EU and its member states are not liable for the commitments of other members.

Since Eurobonds would allow already highly indebted states access to cheaper credit thanks to the strength of other eurozone economies, they are controversial, and may suffer from the so-called  free rider problem, a type of market failure where those who benefit from resources, public goods or common pool resources do not pay for them or pay less.

--

Follow ERR News on Facebook and Twitter and never miss an update!