EU Loosens Fiscal Rules for Defence Spending
The EU Council has activated the national escape clause of the Stability and Growth Pact for 15 member states, allowing them to boost defence spending without breaching EU fiscal limits. The clause permits countries to exceed budget deficit targets by up to 1.5% of GDP specifically for defence, without triggering the excessive deficit procedure, CE Report quotes PAP
The beneficiaries include Poland, Belgium, Bulgaria, Croatia, Czechia, Denmark, Estonia, Finland, Greece, Hungary, Latvia, Lithuania, Portugal, Slovakia, and Slovenia. For countries like Poland already under the deficit procedure, the EU will consider the clause in assessments.
Danish Economic Affairs Minister Stephanie Lose emphasized the importance of defence investment, noting the clause enables enhanced security without compromising financial stability.
The move supports a broader EU rearmament initiative, expected to mobilize €800 billion in additional defence spending, including €150 billion via the SAFE loan programme and €650 billion through loosened fiscal constraints.
