Meeting in Brussels today, European Union finance ministers are set to support the evaluation made in early June by the European Commission, which allowed Portugal to “diverge and exceed the maximum growth rates of net expenditure” from 2025 to 2028, provided this does not surpass 1.5% of the Gross Domestic Product (GDP).
At that time, Brussels recommended this approval to the Council of Member States, expected to be endorsed today, following Portugal’s formal request to the European Commission in late April to activate the clause exempting part of defense investment from budgetary rules, under the EU strategy to strengthen military capabilities.
In addition to Portugal, EU finance ministers are expected to grant a similar approval to activate the national safeguard clause for 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 spring package of the European semester, the European Commission recommended the country “enhance overall defense spending and military readiness,” respecting “the maximum growth rates of net expenditure” while utilizing the national escape clause margin for increased defense spending.
The European Commission, however, has warned that it will monitor the country’s deviation due to necessary defense investment, urging for budgetary balance.
At stake is an 800-billion-euro plan by the EU executive to bolster the Union’s defense, allowing EU member states to activate the national safeguard clause to spend without risking excessive deficit procedures.
This permits an increase in public defense expenditure, with a maximum annual increase of 1.5% of GDP, amounting to 650 billion euros over four years for the entire Union.
Practically, activating this national safeguard clause allows member states to voluntarily invest more in defense without these expenditures impacting the budgetary balance, thus avoiding excessive deficit procedures.
In Portugal, the government announced that it would advance the target of 2% of GDP for defense to this year, after allocating 1.58% of its GDP to the sector in 2024 (4.48 billion euros).
