Greece Could Gain €400 Million in Extra Fiscal Relief via National Escape Clause Activation

Countdown is on for the critical summit of March 20-21, 2025, focusing on supporting and strengthening Euro-defense. Following the extraordinary EU meeting on March 6, 2025, an initial green light was given to the Commission’s proposal for a €800 billion package to boost European defense, alongside a €40 billion package for Ukraine. From the €800 billion defense package, €150 billion will form a new European fund, while €650 billion will come from national defense budgets through the activation of national escape clauses. Greece, according to newsit.gr, estimates it could gain around €400 million in additional fiscal space, potentially used for income relief measures like tax cuts. Discussions about the €150 billion fund are ongoing, with proposals such as issuing Euro-bonds or using reserves as leverage capital. Greece emphasizes the simultaneous activation of national escape clauses for all member states, crucial for countries with high public debt and lower credit ratings. Despite market concerns, optimism exists that Greece won’t be excluded from these terms due to the current geopolitical climate demanding maximum effort for European defense. Final decisions are expected by May, if not April, with the measure taking effect from 2026 for four years.