Even if just half of governments are asking for more budgetary headway to increase defence spending in time, the European Commission is sticking to its forecast that member states may spend up to €650 billion on defence over the next four years.
As part of its ‘Readiness 2030’ plan, the EU executive proposed in March to increase defence spending. This would allow member states to ask for the activation of the national escape clause in the bloc’s Stability and Growth Pact, allowing them to temporarily break from strict fiscal regulations to invest in defence.
The plan would let member nations to increase defence expenditure by 1.5% of GDP each year for four years without facing any repercussions, even if doing so causes their overall deficit to exceed the required 3% of GDP.
The proposal is the main component of the Commission’s €800 billion plan to rearmament the EU, which was anticipated to see an additional €650 billion invested on defence before 2030.
To finish the process before the summer vacation, member states were requested to submit their requests in a coordinated way by April 30 at the latest. 13 of the EU’s 27 member states—Belgium, Denmark, Estonia, Finland, Germany, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Slovakia, and Slovenia had submitted their petitions by Friday.
Also Read:
Trends Developing in Global Equity Markets
The ECB identifies Trade Tariffs and the Competitiveness Gap as Growth Threat
