While the EU maintains strict limits on public debt and deficits—3% and 60% of GDP, respectively—there is a recognition of the need for flexibility in light of current defense requirements.

The EU anticipates needing approximately €250 billion annually, or 3.5% of its GDP, to bolster military capabilities, significantly higher than the current average defense spending of about 2% of GDP among member states.

A White Paper outlining various defense measures is expected to be presented in March 2025, which will facilitate the proposed activation of the safeguard clause.

To meet these needs, the European Commission estimates that around €500 billion in additional defense investment will be required over the next decade.

The national safeguard clause allows countries to request exemptions from standard budgetary rules under exceptional circumstances affecting their public finances.

This initiative aims to address the urgent need for enhanced defense and security investments in light of rising geopolitical tensions.

In Germany, discussions are also taking place regarding reforms to the national debt brake, with Chancellor Olaf Scholz advocating for changes to facilitate increased defense spending.

The European Commission, under President Ursula von der Leyen, is exploring the activation of a national safeguard clause to enable EU member states to increase defense spending without triggering Excessive Deficit Procedures (EDPs).

Currently, several countries, including Belgium, Slovakia, and Italy, are under excessive deficit procedures, complicating their ability to increase defense spending.

The Commission plans to propose this activation in March 2025, allowing member states to boost their defense budgets without negatively impacting their fiscal balance.

This proposal is a direct response to increasing threats from Russia and a reduction in security support from the United States.

If member states exceed the established debt and deficit ceilings, the European Commission can initiate EDPs to ensure public finance sustainability.