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Croatia may increase defense spending even without going into the allowed deficit

by AI | 20.Mar 2025 | Europe in brief AI

Plenkovic says that Croatia may not even need to activate the national clause on deviating from budget rules for increased defense spending, thanks to the favorable fiscal situation.

BRUSSELS, March 20, 2025. Croatian Prime Minister Andrej Plenović arrives at the EU summit. Photo HINA/ Slavko VUKADIN/ ik

BRUSSELS – The Croatian government will discuss and then decide whether to increase defense spending without activating the clause that allows deviation from EU budget rules, Croatian Prime Minister Andrej Plenković said Thursday in Brussels.

The European Commission has proposed that member states be granted a national deviation from the budget rules, which stipulate that the deficit must not exceed 3 percent, and public debt 60 percent of GDP, for the purpose of greater defense spending. This means that proceedings will not be initiated against them if they exceed these limits due to increased spending on defense projects.

The Commission recommends member states increase defense spending by 1.5 percent of their GDP annually over the next four years.

“We will conduct discussions at the government level and see what and how much exactly we need. If we calculate that we need it, we can use this clause,” Plenković said, adding that they have two months to decide.

Given that Croatia’s fiscal situation is quite favorable and within the allowed limits, and considering the fairly high GDP growth, it is possible to increase defense costs without the stated clause.

Plenković positively evaluated the white paper on European defense that the Commission presented on Wednesday.

He singled out joint procurement of equipment and weapons as its most important element.

“Through joint procurement, more is acquired and more favorably, and the fragmentation of European armies and defense systems is one of the key problems. We need more cohesion, we need strategic capabilities, and we must bring Europe to a level where it can take care of its own security. That is the essence of this document and the essence of the entire defense discussion,” Plenković said before the start of the EU leaders’ summit where strengthening European defense is one of the main topics. (March 20, 2025)