The European Commission is set to release a white paper on defense by mid-March, outlining proposals to allow EU member states to increase investment in their defense industries. Ursula von der Leyen, President of the European Commission, announced the proposal to activate the safeguard clause for defense investment during the Munich Security Conference.
The safeguard clause, part of the Stability and Growth Pact, enables Eurozone countries to bypass deficit and public debt regulations under exceptional circumstances. Current rules limit public deficits to 3% of Gross Domestic Product (GDP) and debt to 60% of GDP. The clause was previously activated during the COVID-19 pandemic.
This initiative aims to address the perceived threat from Russia and respond to calls from the United States for increased European defense spending. Von der Leyen estimated the investment needed to bolster European defense at around €500 billion over ten years.
The upcoming white paper will detail financing options for these investments. The proposal has garnered reactions, with the Italian government calling for common financial instruments and French President Emmanuel Macron stating that Eurozone budget rules are "obsolete".