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Spain asks to go “beyond” the 150 billion loan to boost defense spending

by AI | 10.Mar 2025 | Europe in brief AI

Supports Brussels’ proposal to exclude defense investments from deficit computation.

The Minister of Economy, Trade, and Enterprise, Carlos Cuerpo, at a breakfast meeting in Seville. photo: Maria Jose Lopez/Europa Press

Brussels – The Minister of Economy, Trade, and Enterprise of the Government of Spain, Carlos Cuerpo, urged the European Commission on Monday to “go even further” than the 150 billion loan proposed by the president of the European Commission, Ursula von der Leyen, to boost defense spending for the Twenty-Seven and also include a component of grants.

 “The Commission’s proposals are welcome but we believe we need to go even further,” Cuerpo said in statements to the media before the meeting of eurozone Economy and Finance ministers, the Eurogroup, to defend, as the president of the Government of Spain, Pedro Sánchez, already did, the need to complement these loans with a “transfer element.”

The minister emphasized that grants offer, in addition, “two dimensions,” as they allow, on the one hand, an “urgent” and “short-term” response and, on the other, “a reflection of the new multiannual financial framework, which will only take effect from 2028.”

“We have to think about both time horizons, but not only from 2028, also integrating the need for transfers for the most immediate response,” he insisted.

Similarly, he supported Brussels’ proposal to exclude defense investments from the deficit calculations, a fiscal rules flexibility that Cuerpo considers “fundamental” to prevent defense spending from competing with other “very important” national spending such as the social shield.

In this regard, he dismissed Germany’s proposal to reform the fiscal rules, as he believes that the Twenty-Seven have managed to provide them with “sufficient flexibility spaces” to leave room in the coming years to increase spending on defense and security without compromising social expenditures, which are “also part of the DNA of the European Welfare State.”

“The discussion about further medium- or long-term fiscal rules reform can be had, and of course, we are open to that discussion, but in the short term, with the simple activation of the escape clause, we believe there is enough room to respond from the national level with that national budgetary breathing space to these needs,” he concluded. (March 10)