Latvia and 11 other European Union (EU) member states have jointly called for the activation of the national escape clause to allow for increased defense spending, the European Commission (EC) has announced.
Latvia, Estonia, Belgium, Denmark, Greece, Poland, Portugal, Slovakia, Slovenia, Finland, Hungary, and Germany submitted a written request to the EC as part of the armament initiative “ReArm Europe/Preparedness for 2030”, urging the activation of the national escape clause under the Stability and Growth Pact.
The Commission explains that activating the clause would provide additional fiscal space for member states to increase defense expenditures while still complying with EU fiscal rules.
The clause would allow countries to deviate from their approved net expenditure paths or corrective trajectories under the excessive deficit procedure. This type of flexibility is intended for exceptional circumstances beyond the control of member states that have a significant impact on public finances—conditions that the EC says currently apply.
However, to ensure medium-term fiscal sustainability, deviations from the recommended net expenditure path will be capped at an additional 1.5% of GDP per year for defense spending through 2028.
The EC will now assess the requests with the aim of submitting recommendations to the EU Council as part of the 2025 Spring European Semester package. Once the recommendations are issued, the Council will have one month to make a decision.
The Commission notes that more requests may follow, as several other member states have expressed interest in using the clause.
According to European Commission Executive Vice President Valdis Dombrovskis, the EC will continue to ensure that this flexibility is coordinated and helps EU countries boost defense budgets while maintaining sound fiscal policy. “We are also ready to examine requests from other countries,” Dombrovskis emphasized.
As reported, the EC in March published a “White Paper on Defence and Preparedness for 2030”. It also introduced a set of defense-related legislative proposals as part of the “ReArm Europe” plan. The initiative is aimed at enhancing EU-wide defense capabilities by providing new financial tools for member states to scale up defense investment.
The “ReArm Europe/Preparedness for 2030” plan seeks to strengthen Europe’s defense posture through new financial instruments, while the White Paper outlines a strategic vision for defense and identifies critical investment needs.
Dombrovskis previously emphasized that for Latvia, it is particularly important that the new EU strategy prioritizes strengthening the Union’s eastern border to help prevent any threats from Russia or Belarus in coordination with allies.
He noted that the so-called “Eastern Border Shield” project envisions the development of integrated management of the EU’s external border with Russia and Belarus. This includes the construction of physical barriers and fortifications, infrastructure upgrades, the deployment of modern integrated border surveillance systems, and other security measures.