More than half of the 27 member countries of the European Union (EU) have decided to increase their defense spending regardless of EU fiscal rules. Recently, the North Atlantic Treaty Organization (NATO) raised its defense spending target from 2% of gross domestic product (GDP) to over 5%, leading many countries to find themselves in a situation where they must borrow to fund their defense.
On the 8th (local time), according to dpa, EU finance ministers decided that the 15 member countries could borrow up to 1.5% of their GDP to fund defense spending. The Stability and Growth Pact (SGP), known as the EU fiscal rule, originally imposed sanctions if the fiscal deficit and national debt exceeded 3% and 60% of GDP, respectively.
The EU announced in March that it would mobilize 800 billion euros (1.284 trillion won) for rearmament by 2030. Excluding 150 billion euros (241 trillion won) for joint procurement loan support, it decided to stop applying fiscal rules regarding the remaining 650 billion euros (1.043 trillion won), urging member countries to increase their defense spending.
Countries exempted from the debt limit include Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Slovakia, and Slovenia. Germany also applied for an exception to the fiscal rule but was initially excluded as it has not yet submitted its medium-term fiscal plan.