On Wednesday 11 March, in a resolution on the ‘European Semester’ fiscal process tabled by Kira Peter-Hansen (Greens/EFA, Danish) and adopted by a large majority (392 votes in favour, 219 against and 18 abstentions), the European Parliament took the view that “Member States’ commitment to increase defence spending should not come at the expense of other EU common priorities”.
Introduced when the Stability and Growth Pact was revised in 2024, the national opt-out clause has been activated by 17 EU Member States to increase their annual military spending by up to 1.5% of GDP until 2029. According to Parliament, this possibility allows them to act “without an immediate need to finance such increases through spending cuts or revenue-raising measures”.
However, MEPs warn that military spending is “consumptive investment by nature and does not per se increase an economy’s potential output” and, should therefore, “not be financed through increased debt issuance in the long-term".
As part of the ‘European Semester’, the European Council makes annual economic and social policy recommendations to the Member States in line with the EU’s priorities (see EUROPE 13759/14). The European Parliament notes a “lack of progress” in implementing these recommendations, with 25% making no or limited progress between 2019 and 2023.
The European Commission is therefore invited to “rethink” the way in which country-specific recommendations are drawn up and applied, as they could, in the context of the post-2027 EU budget, play a role in access to European funds by guiding investment and reforms at national and regional level.
Finally, MEPs take note of the European Fiscal Board’s conclusion that the Commission has used a certain margin of discretion when delaying or deciding not to open excessive deficit procedures (see EUROPE 13822/24, 13737/19). “An even application of the EU’s fiscal rules is paramount in order to maintain the credibility of the economic governance framework, ensure equal treatment of Member States and uphold a coherent and genuinely European approach”, they stress.
To see the European Parliament resolution: https://aeur.eu/f/l4r (Original version in French by Mathieu Bion)