Brussels, June 4, 2025 (Lusa) - The European Commission authorised Portugal on Wednesday to invest more in defence without risking excessive deficit proceedings, giving the green light to the activation of the national escape clause under EU budget rules.
"During the period 2025 to 2028, Portugal is authorised to deviate from and exceed the maximum rates of growth of net expenditure [...], provided that net expenditure exceeding these maximum growth rates does not exceed the increase in defence expenditure as a percentage of GDP since 2021 and provided that the excess deviation from the maximum growth rates for net expenditure does not exceed 1.5% of GDP," the Commission said in a recommendation to the Council published today.
The information is published on the day the European Commission releases the spring package of the European Semester, the European Union's (EU) annual framework for coordinating economic, budgetary, social and employment policy.
It comes after Portugal formally requested the European Commission at the end of April to activate the clause that allows part of its defence investment to be exempt from budgetary rules, as part of the EU's strategy to strengthen the EU's military capabilities.
In its report on Portugal, now released, the institution recommends that the country "strengthen overall defence spending and military readiness", and to this end "respect the maximum limits for net expenditure growth" and "make use of the margin provided for in the national escape clause for an increase in defence spending".
Another recommendation concerns the adoption of "measures to ensure the budgetary sustainability of the pension system in the medium term".
The European Commission has already warned that it will monitor the country's deviation from the necessary investment in defence, calling for a balanced budget.
In general terms in the EU, the European Commission estimates that increasing defence spending to 1.5% will boost GDP by around 0.5% by 2028.
"The period during which the national escape clause is activated - 2025-2028 - allows Portugal to reorient public expenditure or increase state revenue so that a lasting increase in defence spending does not compromise medium-term budgetary sustainability," the European Commission said.
ANE/ADB // ADB.
Lusa
