Germany has requested the European Commission (EC) for an exemption from European Union limits on government borrowing to increase its defense spending over the next few years, "Reuters" reported, citing a letter from German Deputy Finance Minister Jörg Kukis, BTA reports.
Last week, in an interview with "Reuters" Kukis indicated that Berlin is considering a similar step.
The EC has proposed allowing member states to increase their defense spending by up to 1.5 percent of gross domestic product (GDP) annually for four years, without this leading to disciplinary measures even if the deficit exceeds 3 percent of GDP.
"We see the Commission's proposal for a coordinated activation of the national rescue clause of the Stability and Growth Pact as an important additional measure that will allow for an increase in national defense spending while preserving fiscal sustainability," Kukis' letter said.
The EC hopes that the measure will receive broad support from all 27 member states and accelerate the union's defense investment by around 650 billion euros over four years. The initiative aims to strengthen the ability to deter potential aggression from Russia.
So far, only Portugal and Poland have expressed interest in the proposal. Many countries with high public debt remain skeptical about increasing defense borrowing. Germany's public debt for 2024 is 62.5 percent of GDP - significantly lower than that of Italy, France and Spain, where public debt exceeds 100 percent of GDP, which explains their reluctance to apply for a waiver.
Berlin's request could encourage other countries to consider a similar approach to financing their defense needs.