"You have to use debt funding to pay for the big upfront capital stock," co-author Guntram Wolff told Euronews, adding: "You cannot really fund it with current budgets."
"Any individual country will not provide a sufficient amount of air defence; doing it together makes a lot of sense," said Wolff, who is a senior fellow at the think tank.
Ursula von der Leyen aims to create a European air defence shield, fulfilling an electoral promise amid rising threats from Russia and non-state actors.
Bruegel suggests issuing eurobonds to finance a costly air defence system, a move likely to provoke opposition from frugal EU nations like Germany.
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