Tag: budget rules

EU Council clears Germany’s defence spending plans

Germany's Chancellor Friedrich Merz receives Belgian Prime Minister Bart De Wever (not pictured) at the German Chancellery in Berlin on August 26, 2025 | Photo: Britta Pedersen/dpa

The EU Council has endorsed Germany’s medium-term fiscal plan and activated the national escape clause, allowing limited temporary flexibility for higher defence spending under the Stability and Growth Pact. The clause permits deviation of up to 1.5% of GDP annually for four years while maintaining overall fiscal discipline.