
Today in Brussels, EU ministers are expected to endorse a European Commission assessment made in early June, which allowed Portugal to “diverge and exceed the maximum growth rates of net expenditure” between 2025 and 2028, provided this does not surpass 1.5% of GDP.
This recommendation was made to the Council after Portugal formally requested the activation of a clause that allows part of defense investment to be exempt from budgetary rules as part of an EU strategy to bolster military capacity.
In addition to Portugal, the EU finance ministers are expected to grant similar approval for the activation of the national safeguard clause to 14 other member states, including Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Greece, Croatia, Latvia, Lithuania, Hungary, Poland, Slovenia, Slovakia, and Finland.
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 overall defense spending and military readiness,” while respecting “the maximum growth limits of net expenditure” and utilizing the “national escape clause margin for increased defense spending.”
The European Commission has warned, however, that it will monitor any deviation by the country due to necessary defense investment, urging budgetary balance.
This involves an 800 billion euro plan by the European executive to strengthen the EU’s defense, with provisions for member states to activate the national safeguard clause to spend without risking excessive deficit procedures.
States are allowed a maximum increase in public defense spending of 1.5% of GDP annually, amounting to 650 billion euros over four years for the entire Union.
By activating this clause, member states can voluntarily invest more in defense without these expenses impacting the budget balance, thus avoiding excessive deficit procedures.
The Portuguese government announced its intention to advance the defense target of 2% of GDP to this year, after allocating 1.58% of its GDP (4.48 billion euros) to the sector in 2024.