Germany has rubbished proposals by Italy to use bonds to shell out $ 5bn (£4.32bn) for an EU defence research fund.
The idea to finance any military project in such a way would be “unviable” according to Germany, Handelsblatt newspaper reported.
A government paper reportedly insisted the move would “violate the basic principles of good budget practices and therefore is not a viable option for financing European defence efforts”.
In the same document Germany reportedly argued it would be unacceptable to view national contributions to the fund as one-time measures to obtain exemptions from European stability and growth requirements.
The fund, put forward by the European Commission, was first proposed in late November to allow member states to buy new military helicopters and planes jointly.
Paris and Rome back a proposal from the commission that would allow money for the fund to be raised on capital markets, underwritten by capital or governmental guarantees, but Germany is strongly opposed, the newspaper reported.
The defence fund envisions dedicating two per cent of member nations’ GDP to defence as well as establishing EU multinational forces, it has been reported.
It said Berlin could block any agreement to move in that direction.
The German defence ministry referred questions to the finance ministry, which could not be immediately reached for comment.
In September, Germany and France released a joint paper on the prospect of combined military in the EU.
Both are heavily in support of the idea and have proposed a military base in Brussels.
Italy and Hungary are also pushing for the creation of a joint army.
Britain has always been opposed to the creation of a superstate armed forces.
But with Brexit, the EU has a green light to continue creating its dream miltary force.
German defence minister Ursula von der Leyen admitted Britain had “paralysed” the fighting force’s development and “blocked everything that had Europe written on it”.
According to those behind the joint force, it could be mobilised on behalf of the bloc to act in any situation in which NATO could be unwilling to.