On Friday, 14 February, President of the European Commission Ursula von der Leyen explained how Member States could use the flexibility in the revised Stability and Growth Pact to invest more in the defence sector—a possibility first mentioned after the informal European leaders’ retreat in early February (see EUROPE 13572/16).
During the Munich Security Conference (see other news), Mrs von der Leyen brought up the option of using the new “escape clause”, which a Member State could, on its own, invoke in order to contravene European fiscal rules in the event of extraordinary circumstances. “This opens the door for [...] investing more in defence [in a targeted way]. So, this is [an] individual [measure] for each Member State”, she indicated.
According to the regulation (2024/1263) governing the preventive arm (government deficit below 3% of GDP) of the Stability Pact, the Council of the EU may—following a Member State’s request and on the European Commission’s recommendation—adopt, within four weeks, a recommendation allowing a Member State to deviate from its net expenditure path “where exceptional circumstances outside the control of the Member State have a major impact on the public finances of the Member State concerned, provided that such deviation does not endanger fiscal sustainability over the medium term” (Article 26). The regulation refers to “unpredictable exogenous events that are outside the control of the Member State”.
The EU Council then sets a time limit for this exemption but may also, at the request of the country concerned and on a recommendation by the European Commission, extend the exemption period. This extension may be granted several times, but each time, it cannot exceed one year. (Original version in French by Mathieu Bion)