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EU Considers Loosening Debt Rules to Boost Defense Spending

Ursula von der Leyen proposes activating a special clause to enable significant increases in military budgets across member states.

  • EU Commission President Ursula von der Leyen announced plans to propose the activation of a special exemption clause in EU debt rules to facilitate higher defense spending.
  • The proposal is driven by growing security concerns from Russia and a reduced U.S. commitment to European defense under President Donald Trump.
  • Currently, EU nations allocate an average of 2% of GDP to defense, but Trump has called for NATO members to raise this to 5%, which would require substantial budget increases.
  • The EU Commission estimates that approximately €500 billion in additional defense investments will be needed over the next decade for projects like air defense systems and border security.
  • The exemption clause, previously used during the COVID-19 crisis, would allow EU countries to temporarily exceed debt and deficit limits for defense-related expenditures.
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