Brussels, 8 July 2025
The EU Council today activated the national escape clause under the Stability and Growth Pact (SGP) for 15 member states to help facilitate their transition to higher defence spending at national level while ensuring debt sustainability. The member states concerned are Belgium, Bulgaria, Croatia, Czechia, Denmark, Estonia, Finland, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Slovakia, and Slovenia.
At this critical juncture, investment in our defence capabilities must remain our top priority. Today’s activation of the national escape clause will allow member states to ramp up defence spending while maintaining sustainable public finances.
Stephanie Lose, Danish minister for economic affairs
The clause covers a period of four years and a maximum of 1.5% of GDP in flexibility. In practice, this activation means that the Commission and the Council may decide not to open a new excessive deficit procedure for these 15 member states, even though they exceed the maximum net expenditure path as approved by the Council, provided that this excess is due to increased defence spending.
For all other expenses, member states remain bound by the budgetary rules and must remain committed to the implementation of the revised economic governance framework irrespective of the clause’s activation.
The use of this flexibility should contribute substantially to bolstering the defence and security capabilities of the European Union and the protection of citizens. It will also reinforce the EU’s overall defence readiness, reduce strategic dependencies, address critical capability gaps and strengthen the European defence technological and industrial base across the Union.
Background
All member states are committed to the build-up of necessary defence capabilities in the EU, as recalled in the European Council conclusions on European defence of 6 March 2025.
The reformed EU economic governance framework allows for member states to make use of flexibility, where exceptional circumstances outside the control of that member state have a major impact on its public finances, while safeguarding fiscal sustainability over the medium term. Russia’s war of aggression against Ukraine and its threat to European security constitute such exceptional circumstances.
In this context, Belgium, Bulgaria, Croatia Czechia, Denmark, Estonia, Finland, Germany, Greece, Hungary, Latvia, Lithuania, Poland, Portugal, Slovakia and Slovenia decided to request the activation of the national escape clause.
Germany’s request can be assessed once it has finalised its medium-term fiscal-structural plan. In other member states, already planned build-up of defence capabilities is also underway. The Council stands ready to act on possible requests to activate the national escape clause by additional member states.