BERLIN - The German government has formally requested to trigger the E.U.'s budget escape clause to enable a boost in defense spending.
POLITICO reported on April 28 that the German government has sent a letter to the E.U. requesting the action, pointing to the war in Ukraine and the "changing environment" of global security as requiring a build-up in German defense capabilities that will have "a major impact on [Germany's] public finances. Acting Finance Minister Jörg Kukies sent the letter to the E.U. on April 24.
Earlier this year, the E.U. rolled out a new policy geared towards supporting its members' defense spending drives. One core component of the E.U. plan is to enable governments to trigger the escape clause in order to avoid falling afoul of the bloc's tight budget deficit and debt rules. E.U. members are expected to keep budget deficits to under 3 percent of GDP, and national debt should not exceed 60 percent of annual economic output.
Germany's own budget rules -- limiting deficits to no more than 0.35 percent of GDP -- were relaxed under agreements between the incoming CDU/CSU and the Social Democrats.
The changes could enable Berlin to ramp up its defense spending, while also making significant investments in German infrastructure.