The European Commission sticks to the estimate that the Member States could spend up to 650 billion euros in defense over the next four years despite only half of the governments requiring more budgetary progress to increase investments in the sector in time.
The EU executive proposed in March as part of its “2030 preparation” plan to increase defense expenses to allow member states to request the activation of the national escape clause in the block stability and growth pact in order to allow them to temporarily deviate from strict budgetary rules to invest in the defense.
Under the proposal, the Member States would be authorized to increase the defense expenses by 1.5% of the gross domestic product (GDP) for four years without consequences each year, even if this leads to their total deficit on the 3% of compulsory GDP.
The Commission estimated at the time that this could see an additional 650 billion euros invested in the defense before 2030, making the proposal the key pillar in its Plan of 800 billion euros to rearrange the block.
The Member States were invited to put their request in a coordinated manner before April 30 at the hope that the entire process could be completed before the summer holidays.
Friday, 13 of the 27 EU member states had recorded their requests, notably Belgium, Denmark, Estonia, Finland, Germany, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Slovakia and Slovenia.
'A ball figure'
A commission spokesperson sought to present the number as a success on Friday, telling journalists that “today, (we have) half of the member states, so it is a significant number, and we indicate that this number will increase even further in the near future”.
The Commission had declared earlier this week that the date of April 30 was a “gentle deadline” and that they would accept requests beyond that date as long as it had enough time to analyze them before the release of the spring semester package. The report, scheduled for June 4, sees the Commission give recommendations from the Member States on how to meet the economic challenges they face.
The estimate of 650 billion euros, said the commission spokesman on Friday, “is a ball figure, it is based on a set of assumptions”.
“At that time, of course, we did not know how many member states would actually activate the clause and we wanted to give an order of size of the budgetary space which could be made available by this measure,” added Balazs Ujvari.
“But of course, it is not possible for the moment to update this figure in a responsible manner because, on the one hand, we do not know how many countries will finally apply – we have 13 for the moment, but the option is still there to submit additional requests – (and) we do not know at what rate they will increase their defense expenses,” he added.
The first update estimate will not be available until next year, he continued, based on defense expenditure data from 2025.
To see their requests approved, the Member States must prove that they are faced with exceptional circumstances out of their control, that these exceptional circumstances have an impact on their public finances and that the deviation under the national escape clause does not in danger of their budgetary sustainability in the medium term.
Safety loans (R)?
Several of the Member States which have requested the gap are however targeted by an excessive deficit procedure, which means that their deficits exceed the 3% authorized on the GDP threshold. These include Belgium (4.8%), Hungary (4.1%), Poland (7.9%) and Slovakia (8.8%).
If requests for activation of the national escape clause are granted to the Member States under the procedure, “this will be taken into account when we carry out our evaluation and we will take into account the flexibility which is available for this Member State because of the national escape clause,” Ujvari, the Commission on Friday.
ADVERTISEMENTThe other countries at risk of sanctions for their budgetary situation are France, Italy, Malta and Romania.
France, whose deficit amounted to 6.1% of GDP in the last quarter of 2024should not make a request, includes Euronews, but would probably participate in the other financial mechanism deposited under “rearent 2030”.
As part of the safe program, Member States will be able to obtain parties of 150 billion euros that the Commission plans to raise on the market and to give the Member States as loans.
Unlike national chest money, these EU funds would be assigned to weapons systems that are mainly European manufacturingand the result of joint markets among several Member States.
ADVERTISEMENTThe proposal is currently examined by the Council. Once adopted, the Member States will have six months to request such a loan.
