Latest news with #NationalEscapeClause
Reuters
28-04-2025
- Business
- Reuters
Germany asks for EU leeway on defence spending, letter shows
BERLIN, April 28 (Reuters) - Germany has asked the European Commission for an exemption from European Union borrowing limits in order to increase defence spending in the coming years, according to a letter from German Finance Minister Joerg Kukies seen by Reuters on Monday. Kukies told Reuters in an interview on Friday that Germany was likely to request the exemption. The European Commission has proposed allowing member states to raise defence spending by 1.5% of gross domestic product (GDP) each year for four years without any disciplinary steps that would normally kick in once a deficit is above 3% of GDP. "We see the Commission's proposal for a coordinated activation of the National Escape Clause of the Stability and Growth Pact as an important complementary measure to enable increased national defence spending while safeguarding fiscal sustainability," Kukies said in the letter. The Commission had hoped the proposal would be widely taken up by the 27 EU countries and help boost EU defence investment by 650 billion euros over the next four years to deter potential Russian aggression. However, only Portugal and Poland had so far signalled interest in the exemption. EU countries with high national debt are sceptical of borrowing more to spend on defence. Germany's request may encourage other countries to follow the path, although its government debt ratio of 62.5% of GDP in 2024 is much lower than that of Italy, France and Spain, which are all above 100% and reluctant to apply for the exemption.
Yahoo
04-03-2025
- Business
- Yahoo
Ursula von der Leyen annoucnes ReArm Europe plan to boost European defense capabilities
European Commission President Ursula von der Leyen presented on March 4 the ReArm Europe plan aimed at strengthening the defense capabilities of European countries. The announcement comes amid seismic geopolitical shifts as U.S. President Donald Trump upends Washington's long-standing policy on Ukraine and Russia while casting doubt on his commitments to transatlantic security. "The real question in front of us is whether Europe is prepared to act as decisively as the situation dictates, and whether Europe is ready and able to act with speed and with the ambition that is needed," von der Leyen plan consists of five points designed to increase defense spending, as well as defense procurement and first step is to unleash the use of public funding for defense at the national level. The European Commission is proposing to activate the National Escape Clause of the Stability and Growth Pact, which would allow member states to significantly increase their defense spending without triggering the excessive deficit member states would increase their defense spending by 1.5 percent of GDP on average,this could create fiscal space of close to 650 billion euros ($28 trillion) over a period of four years, according to von der Leyen. The second point is a new instrument that will provide 150 billion euros ($6.5 trillion) of loans to member states for defense investments, "to spend better and spend together." "We're talking about pan-European capabilities domains like, for example, air and missile defense, the artillery systems, missiles and ammunition, drones and anti-drone systems, but also to address other needs from cyber to military mobility, for example," von der Leyen said. According to the president, with the new equipment, member states can significantly increase their support for Ukraine and provide military aid for it third point of the plan is aimed at increasing investment in the defense sector. The European Union will therefore introduce additional opportunities and incentives for member states to decide whether they want to use cohesion policy programs to increase defense last two areas of action cionsider mobilizing private capital by accelerating the Savings and Investment Union and through the European Investment Bank, von der Leyen said. The ReArm Europe plan could mobilize close to 800 billion euros ($34.8 trillion) of defense expenditures for "safe and resilient Europe," the president added."Europe is ready to assume its responsibilities," she said. "This is a moment for Europe and we are ready to step up." Read also: BREAKING: Trump halts military aid to Ukraine, Bloomberg reports We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
