The Council of the European Union formally authorised Spain, on Friday 12 June, to activate the national escape clause of the Stability and Growth Pact, which will allow it to increase its military spending by up to 1.5% of national GDP until the end of 2028.
“We have adopted a recommendation authorising Spain to depart from the maximum growth rates of net expenditure” agreed at European level, said Cypriot Finance Minister Makis Keravnos, current President of the Economic and Financial Affairs Council.
Spain is the eighteenth Member State to activate the national escape clause of the Stability and Growth Pact. It could thus benefit from the limited budgetary flexibility suggested by the European Commission to allow EU countries to provide aid aimed at reducing dependence on fossil fuels, in particular imported ones (see EUROPE 13886/4).
See the draft decision: https://aeur.eu/f/ma0
Bulgaria. European Commissioner for Economy Valdis Dombrovskis also announced that the Commission, following the favourable opinion of the Economic and Financial Committee of the Council of the EU, would propose the opening of an excessive deficit procedure (EDP) against Bulgaria.
According to the EU institution, the excessive deficit in Bulgaria reached -3.5% of GDP in 2025 and is expected to rise to -4.1% in 2026, owing in particular to expenditure linked to increases in civil servants’ salaries (see EUROPE 13880/5).
It will be for the Economic and Financial Affairs Council to take a formal decision, probably on Friday 10 July.
Malta. On Friday, the Council also closed the EDP opened against Malta since July 2024.
After reaching 2.2% of national GDP in 2025, the Maltese deficit is expected to remain well below 3% of GDP, at 2.2% of GDP in 2026 and 2.1% of GDP in 2027, according to the Commission’s economic forecasts.
See the Council decision: https://aeur.eu/f/mc2 (Original version in French by Mathieu Bion)