Critical Four-Day Summit in The Hague and Brussels: How Will NATO and EU Decisions Impact Athens?

This week, which has just begun, is expected to be exceptionally crucial for the trajectory of the Greek economy. This is because between Tuesday, June 24, and Friday, June 27, decisions will be made at the leadership level of the most important international organizations to which Greece belongs. The first organization is NATO, and the second is the European Union (EU), amidst escalating tensions in the Middle East following yesterday’s U.S. attack on Iran. On June 24-25, a NATO summit is scheduled in The Hague, followed immediately by an EU summit in Brussels on June 26-27. The central agenda item for the NATO summit, as stated by NATO Secretary General Mark Rutte, focuses on increasing defense spending targets to 5% of GDP, with the timeline for achieving this goal still under discussion, ranging from 2028 to 2035. Meanwhile, the EU summit’s agenda is anticipated to focus on the ReArmEU 2030 program, including the SAFE fund worth €150 billion and the activation of the escape clause allowing member states to increase defense spending up to 1.5% of GDP. Sixteen out of 27 EU countries, including Greece, have already requested the activation of this clause for 2025-2028. However, the final framework for activating the escape clause remains undecided, along with the SAFE fund’s operational details. Potential adoption of the 5% target could significantly impact Greece’s defense budget, necessitating substantial increases over a shorter timeframe than initially planned. This scenario raises concerns about funding sources, public debt, and socio-economic implications, especially amid geopolitical uncertainties. The outcomes of these summits are likely to redefine defense strategies across Europe, influencing national budgets and economic policies.