EU Council OKs Fiscal Rules Flexibility for Greece, 14 Other Member-States

The EU Council on Tuesday activated the so-called “national escape clause” under the Stability and Growth Pact (SGP) for 15 member-states, one of which is Greece, to help facilitate, as it said, “their transition to higher defense spending at national level while ensuring debt sustainability.”

The decision was a welcome, albeit expected development for Athens, which has long pressed the EU to exclude a portion of defense spending from being included in fiscal disciplinary regimes aimed to keep member-states’ debts sustainable.

Besides Greece, the other countries benefitting from the decision are Belgium, Bulgaria, Croatia, Czechia, Denmark, Estonia, Finland, Hungary, Latvia, Lithuania, Poland, Portugal, Slovakia and Slovenia.

According to an announcement by the Council, 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. according to vima.com

The EU Council added:

“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.”

“Last April Greece submitted a request to the Council and the Commission to activate the national escape clause, with Athens citing heightened geopolitical tensions, what it called Russia’s “continued war of aggression against Ukraine and its threat to European security constitutes an existential challenge for the Union, which requires a significant increase of defense spending.”

Source: pagenews.gr