Germany has requested an exemption from the borrowing limits imposed by the European Union (EU) in order to increase its defense expenditures, according to a letter from German Finance Minister Gerhard Kuckies. As reported by Reuters, the finance minister had mentioned in a Friday interview (April 25, 2025) that Germany might seek this exception. The EU has proposed allowing member states to increase their defense spending by 1.5% of their GDP annually for four years without facing disciplinary measures typically enforced when deficits exceed 3% of GDP. Kuckies stated in the letter: “We consider the Commission’s proposal for coordinated activation of the National Escape Clause of the Stability and Growth Pact as a significant complementary measure to allow increased national defense spending while maintaining fiscal sustainability.” The Commission hoped the proposal would be widely adopted by the 27 EU countries, boosting Union defense investments by €650 billion over the next four years as a deterrent against potential Russian aggression. However, only Portugal and Poland have shown interest so far. EU countries with high national debt are reluctant to borrow more to boost defense spending. Reuters suggests Germany’s request could encourage other nations to follow suit, despite its relatively low state debt ratio at 62.5% of GDP in 2024, compared to Italy, France, and Spain, whose ratios exceed 100%, making them less inclined to seek exemptions.
Germany Requests Exemption from EU Borrowing Limits to Boost Defense Spending
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