Brussels’ bold defence plan meets budget hesitation from EU members

More than half of the EU’s 27 countries have formally requested increased budget flexibility from the European Commission to enhance defence spending, sparking concerns that Brussels’ rearmament initiative might not meet its 800-billion-euro ($907 billion) goal.

So far, only 14 member states have officially responded to Brussels’ appeal to trigger the “national escape clause”, which permits governments to raise military spending by an extra 1.5 per cent of GDP annually over the next four years without breaching the EU’s fiscal rules, Caliber.Az reports via foreign media. 

This measure is a key component of the Commission’s ‘ReArm Europe’ strategy, which aims to strengthen Europe’s defence posture amid Russia’s military aggression and diminishing US support for regional security. According to the Commission, the countries that have filed formal requests to use the clause are Belgium, Bulgaria, Denmark, Germany, Estonia, Finland, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Slovenia, and Slovakia. Czechia and Croatia have announced their intention to apply but have not submitted formal applications. 

Other countries, including Spain—the EU’s fourth-largest economy—could follow shortly, EU officials and diplomats said. “There might be more that are about to [apply], but, formally, we have received 14 requests at the moment,” stated Balazs Ujvari, the Commission’s spokesperson on economic matters. In addition to the escape clause, which the Commission estimates could generate up to 650 billion euros ($737 billion) in defence spending over four years, the ReArm Europe framework includes up to 150 billion euros ($170 billion) in Commission-issued loans to co-finance joint military initiatives. 

However, wealthier nations such as Germany and the Netherlands are expected to forgo the so-called “SAFE” loans due to their access to cheaper borrowing rates compared to the Commission’s offerings. Experts and diplomats remain doubtful that invoking the clause will result in 650 billion euros of new defence investment. EU authorities clarify that the estimate assumes all 27 member states will “gradually and steadily” increase their military spending by an additional 1.5 per cent of GDP compared to 2021 levels through 2028. 

Officials noted that the target might still be achievable if fewer countries raise their defence budgets at a faster rate. Of the 14 countries that have applied to activate the escape clause, Belgium, Hungary, Poland, and Slovakia are currently undergoing an “excessive deficit procedure” (EDP) for surpassing the EU’s 3 per cent budget deficit ceiling. Balazs Ujvari said that countries making use of the clause may be removed from the EDP. The added “flexibility” from the clause “will be taken into account” when Brussels evaluates national deficits in the future, he said. France, Italy, Malta, and Romania are also under an EDP.

By Naila Huseynova