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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.