Economy Commissioner Valdis Dombrovskis stressed the flexibility is a stop-gap until countries reframe budgets around higher defense needs.
“We need to avoid defense washing: that everything suddenly becomes ‘defense,’” Valdis Dombrovskis told a group of media, including POLITICO. | Nicolas Tucat/AFP via Getty Images
March 19, 2025 1:07 pm CET
BRUSSELS — The European Commission announced today a plan to activate an emergency clause allowing EU governments to temporarily deviate from fiscal constraints to bolster defense spending.
However, the Commission has drawn a firm line on what qualifies as defense investment, rejecting Spain’s push to expand the definition to include climate-related civil protection or general cybersecurity costs.
In a bid to rapidly strengthen Europe’s military capabilities after years of what Economy Commissioner Valdis Dombrovskis called “underinvestment” due to the luxury of a peace dividend, the EU executive is proposing to permit member states to increase defense spending by up to 1.5 percent of GDP annually for the next four years. The initiative could unlock up to €650 billion if all countries opt in.
While the move offers unprecedented fiscal flexibility, the Commission is intent on preventing a broad reinterpretation of defense spending to guard against a repeat of what happened with the European Green Deal, when all sorts of projects were recategorized as green in an attempt to take advantage of the additional funding.
“We need to avoid defense washing: that everything suddenly becomes ‘defense,’” Dombrovskis told a group of media, including POLITICO, on Tuesday.
The decision comes amid heightened security concerns following Russia’s full-scale invasion of Ukraine and shifting U.S. foreign policy priorities. While Eastern European nations have already ramped up military investment, countries farther from the front lines — such as Spain and Italy — have been more reluctant to redirect funds toward defense.
Spanish Prime Minister Pedro Sánchez had argued last week that defense spending should encompass broader civil defense costs, including cybersecurity and climate-related emergency responses.
However, the Commission has ruled out such an expansive approach. Instead, its framework will include expenditures on soldiers’ salaries, military training, equipment, infrastructure, and some dual-use cybersecurity initiatives, but does not stretch to cover Spain’s proposed additions.
With Russia’s war raging and the U.S. offering less security assurance to Europe, “we cannot wait 10 years to strengthen our defense capacities … It’s something we need to do now,” Dombrovskis said.
But he also underscored that this measure was only a temporary reprieve. While it will “provide member states with immediate budgetary space” and help “alleviate” short-term economic pressures, Dombrovskis warned that Europe must prepare for a lasting increase in defense spending. “At the end of the day, indeed, we’ll need to arrive at structurally higher defense spending levels, which implies recalibration on the expenditure side or additional new measures.”
The Commission wants EU governments to decide by the end of April whether to activate the emergency clause in the hope the policy will take effect before the summer recess. However, each country will retain autonomy over its final decision.