The European Union’s finance ministers have approved Portugal’s request to invest more in defense without risking an excessive deficit procedure, activating the national escape clause.
“Today, the Council activated the national safeguard clause under the Stability and Growth Pact for 15 Member States to facilitate their transition towards increased national defense spending, while ensuring debt sustainability,” stated the institution that unites EU countries.
Meeting in Brussels, the ministers endorsed the European Commission’s assessment made in early June, which allowed Portugal from 2025 to 2028 to “deviate and exceed maximum net expenditure growth rates,” provided this does not surpass 1.5% of GDP.
Besides Portugal, the EU finance ministers similarly approved the activation of the national safeguard clause for 14 other Member States, including Belgium, Bulgaria, the Czech Republic, Denmark, Estonia, Greece, Croatia, Latvia, Lithuania, Hungary, Poland, Slovenia, Slovakia, and Finland.
“Using this flexibility should substantially contribute to strengthening the EU’s defense and security capabilities and citizen protection. It will also enhance the EU’s overall defense readiness, reduce strategic dependencies, fill critical capability gaps, and strengthen Europe’s defense technological and industrial base,” added the EU Council.
Brussels recommended this approval to the Council after Portugal formally requested in late April the European Commission to activate the clause allowing part of the defense investment to be exempt from budgetary rules as part of the EU’s strategy to bolster military capabilities.
In a report on Portugal released in early June, as part of the European semester spring package, the European Commission recommended that the country “enhance the overall defense expenditure and military readiness,” while respecting the “maximum limits for net expenditure growth” and utilizing the margin provided by the national escape clause for increased defense spending.
The European Commission has warned it will monitor Portugal’s deviation necessary for defense investment, urging budgetary balance.
This relates to an 800-billion-euro plan by the European Commission to strengthen EU defense, allowing Member States to activate the national safeguard clause to spend without risking excessive deficit procedures.
This permits a public defense spending increase of up to 1.5% of GDP per year, resulting in 650 billion euros over four years for the entire Union.
With this national safeguard clause activation, Member States can voluntarily invest more in defense without such expenditures affecting the budget balance, thereby avoiding excessive deficit procedures.
In Portugal, the government announced it would advance the defense GDP target to 2% for this year, after allocating 1.58% of its GDP to the sector in 2024 (4.48 billion euros).
