KE: half of the countries are applying for a defensive exit clause

By Friday, 13 EU member states have submitted a request to exempt defense spending from budgetary rules, according to data from the European Commission. Countries that are subject to excessive deficit procedures will gain flexibility, said EC spokesperson Balazs Ujvari.

According to fiscal rules, the deficit of member states cannot exceed 3% of GDP, and debt cannot be more than 60%. Defense spending of countries that benefit from the exit clause will be exempt from these rules.

Ujvari reported that by Friday, the request for the defense exit clause has been submitted by: Belgium, Denmark, Estonia, Finland, Greece, Germany, Lithuania, Latvia, Poland, Portugal, Slovakia, Slovenia, and Hungary. This number is still lower than that provided by Finance Minister Andrzej Domański on Wednesday. The EC only considers countries that have submitted a formal request, while the EU Council, chaired by Poland, also takes into account verbal commitments. The Polish finance minister also mentioned Bulgaria, the Czech Republic, and Croatia.

Therefore, as Ujvari explained on Friday, the number reported by the EC in the coming days should increase.

The EC will assess the requests in May and issue its decision on June 4. The EC spokesperson did not want to speculate on whether all countries requesting an exemption from EU budgetary discipline for defense spending would receive such a waiver, but stated that it is highly likely. “We believe there is a good reason for these requests to be considered,” he emphasized.

Among the applicants are countries that are subject to excessive deficit procedures; these include Poland, Belgium, Slovakia, and Hungary.

“If a country subject to excessive deficit procedures requests the activation of the so-called national exit clause and this request is positively considered (by the EC – PAP) and the EU Council agrees, this will be taken into account during the assessment, and the flexibility that these member states will gain through the clause will also be considered,” said spokesperson Ujvari.

Suspending spending rules for defense spending is one of the elements of the EU rearmament package proposed by EC President Ursula von der Leyen in February, which was agreed upon by the leaders of the member states.

The application of such an exception is intended to allow countries to spend an additional equivalent of 1.5% of GDP on defense from 2025 to 2029; the reference point is the year 2021.

According to EC estimates, the European rearmament plan is expected to mobilize an additional 800 billion euros across the EU. The EC will provide 150 billion euros under the SAFE loan program, while the remaining 650 billion euros is the amount that the EC believes can be obtained by suspending spending rules in the area of defense.

So far, large EU economies such as France, Italy, Spain, and the Netherlands have not requested an exemption. When asked whether it is still possible to mobilize the 650 billion euros for defense in national budgets without their participation, the EC spokesperson noted that not all countries need an exemption from spending rules, as there are states that have sufficient fiscal space to increase military spending without risking excessive deficit procedures. (02.05.2025)