On April 30, 2025, the Council of the European Union announced the coordinated application of "national fiscal flexibility" for member states.
Under the EU's new economic rules, countries can be more flexible in their budgetary policies, meaning they can increase their public debt levels if extraordinary circumstances significantly affect their finances. Russia's war against Ukraine has become just such a circumstance, as countries are forced to increase defense spending for the sake of European security.
To date, 16 European Union countries, including Poland, Germany, Lithuania, Latvia, Estonia, Finland, Hungary, the Czech Republic and Bulgaria, have already requested the activation of this mechanism. It allows for an increase in defense spending to 1.5% of GDP over four years without disciplinary sanctions for exceeding the national debt threshold.
This initiative aims to strengthen the EU's defense capabilities, address critical gaps in military capabilities, and develop its own military-technological base.
We would like to remind you that almost half of NATO countries do not meet the 2% GDP defense spending target. These include Belgium (1.3%), Spain (1.4%), Italy (1.6%), Germany (1.9%), the Netherlands (1.9%), and the Czech Republic (1.9%).