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Brussels (ANSA) – The EU is gearing up to activate public spending in defense. The separation of investments in the sector from those allowed under the constraints of the Stability Pact will occur with the joint activation of ‘national safeguard clauses’. It will not be a shield for everyone by suspending the application of the Pact, as during Covid.
And above all, in each State, it will not have to “jeopardize budget sustainability in the medium term,” according to EU rules. It will be done “in a controlled and conditional way,” as European Commission President Ursula von der Leyen had previously announced, outlining how she wants to use economic governance to support defense spending.
An initial discussion between the States on this topic is expected at the meetings of the Finance Ministers at the Eurogroup and the EU Ecofin Council in Brussels. The topic is not on the agenda, but no one doubts that it will be the focus of ministerial talks. Among the ‘frugal’ countries, the Baltic and Scandinavian nations have recently been pushing for greater investment in security, and from what leaks out, some still prefer national investments with exceptions to the Pact, compared to hypothetical common EU funds.
German Chancellor Olaf Scholz, in the meantime, has already expressed support for the possibility of relaxing the Pact provided that it is “limited in time and respecting the financial solidity of all member states,” apart from expressing support for a reform of the German debt brake to increase defense spending.
On fiscal rules, the former ECB President and Italian Prime Minister Mario Draghi also intervened in an editorial for the Financial Times, noting that more than fearing US tariffs, the EU should look at those it has imposed on itself internally. “Europe has focused on individual or national objectives without calculating their collective cost,” he wrote, urging a “more proactive use of fiscal policy” (January 15).