Portugal inches towards increasing defence spending to potential of 3%
Portugal’s government is going to ask the European Commission to activate the clause that allows an exception to compliance with budgetary rules to accommodate the increase in defence spending.
A note released by the Ministry of Finance today explains that the activation of this clause allows Defence-related expenditure, up to a limit of 1.5% of GDP, not to be counted in the limits imposed by the net primary expenditure ceilings defined in the National Medium-Term Budgetary-Structural Plan (POENMP) for 2025-2028.
Similarly, it adds, defence-related spending, up to the limit of 1.5% of GDP, will not be counted in the assessment of compliance with the reference value for the deficit (3%).
“This decision was agreed with the largest opposition party, and the government heard the Socialist Party in this process,” the note states.
Right now, Portugal spends 1.55% of GDP on defence, thus an additional 1.5% would put the country into a bracket far more favourable with the NATO hierarchy.
The Ministry of Finance adds that the European Commission “has been endeavouring to ensure that Member States adhere significantly to this national derogation clause” as part of the White Paper on European Defence – Readiness 2030, a short and long-term strategy alongside the ReArm Europe/Readiness 2030 investment package. ‘We have to buy more in Europe because that means strengthening the technological and industrial base of European defence and it means stimulating innovation by creating an EU-wide market for defence equipment,” said president of the commission Ursula Von der Leyen
Member states have until the end of this month to submit their applications, after which it will be up to the European Commission to assess and validate them.
Source: LUSA/ Expresso
