EU: Four countries plead for a relaxation of budgetary rules on Defense

by Jan Strupczewski

PRAGUE, September 9 (Reuters) – Greece, Romania, Poland and Lithuania are asking the European Commission to ease its budget rules to take into account the need for additional defense spending following the invasion of Ukraine by Russia, according to a joint document seen by Reuters.

EU Economy and Finance Ministers, who have been meeting in Prague since Friday, will discuss the issue on Saturday.

The Stability and Growth Pact comes with a safeguard clause which was activated in March 2020 to facilitate a suspension of fiscal rules in the face of the COVID-19 pandemic. This waiver has been extended until the end of 2023 due to the economic fallout from the war in Ukraine.

In a document prepared for Saturday’s meeting, Greece, Romania, Poland and Lithuania say EU doctrine, designed to limit public borrowing and preserve the value of the euro, must now incorporate threats to sovereignty and the territorial integrity of the countries of the bloc.

Despite Germany’s opposition, the European Commission is open to such a proposal.

“It is high time to include defense spending in this picture,” EU Internal Market Commissioner Thierry Breton said this week, adding that the discussion on changes to EU debt rules should to be “without taboo”.

Thierry Breton has been pleading since the start of the war in Ukraine, on February 24, for an increase in defense spending, with a target of 2% of GDP for each of the Member States.

The document asks the Commission to consider current defense emergencies before initiating any disciplinary procedure with regard to the Maastricht rules (public deficit less than 3% of GDP, public debt less than 60% of GDP). (Report Jan Strupczewski; French version Valentine Baldassari, edited by Sophie Louet)

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