16 countries to ask EU for fiscal leeway to spend big on defense

BRUSSELS — Over half of the countries in the European Union plan to trigger an emergency clause allowing them to make defense investments that push them over the bloc's budgetary spending limits.

Belgium, Bulgaria, Czechia, Denmark, Germany, Estonia, Greece, Croatia, Latvia, Lithuania, Hungary, Poland, Portugal, Slovenia, Slovakia, and Finland want greater flexibility to boost their own defense capacity, according to a Council statement.

Twelve of them have already filed a formal request to the EU executive, the Commission said.

The exemption gives countries room to increase their spending on defense up to 1.5 percent of their gross domestic product each year for four years without breaching EU fiscal rules.

Germany is the only major EU economy planning to use the clause. Countries with stretched budgets, such as Italy or France, are not asking fiscal flexibility for procuring military equipment — nor are countries with much healthier public finances, such as the Netherlands or Sweden.

Despite falling into the latter group, Denmark also decided to join in on the request to send a political message. Economy Minister Stephanie Lose said in a statement: “The Danish activation will help send a signal to the outside world that the EU countries are united in the rearmament effort.”

The EU executive invited governments to decide by Apr. 30 in order to coordinate fiscal policy in front of markets and activate the clause altogether by July. However, the deadline is not binding.

Spanish Economy Minister Carlos Cuerpo said on Wednesday that his country will take a decision “over the coming months.”

Italian Finance Minister Giancarlo Giorgetti is convinced that the government in Rome can reach the NATO target of 2 percent in defense spending by tweaking its accounting to include more items. The country will wait until the NATO summit in June when new expenditure targets for all countries are supposed to be agreed upon — the U.S. is pushing to raise military spending for all members — to potentially consider further steps.