Government asks European Commission to trigger Defence spending exception clause
The Ministry of Finance will ask Brussels to activate the "national derogation clause" so that it can spend on Defence without jeopardising compliance with budgetary rules.
Portugal’s government is going to ask the European Commission to activate the clause that allows an exception to compliance with budgetary rules to accommodate the increase in defence spending.
A note released by the Ministry of Finance on Wednesday explains that the activation of this clause allows Defence-related expenditure, up to a limit of 1.5% of GDP, not to be counted in the limits imposed by the net primary expenditure ceilings defined in the National Medium-Term Budgetary-Structural Plan (POENMP) for 2025-2028.
Similarly, it adds, defence-related spending, up to the limit of 1.5% of GDP, will not be counted in the assessment of compliance with the reference value for the deficit (3%).
“This decision was agreed with the largest opposition party, and the government heard the Socialist Party in this process,” the note states.
The Ministry of Finance recalls that the European Commission “has been endeavouring to ensure that Member States adhere significantly to this national derogation clause”, in order to increase the financing capacity in this sector.
Once the member states have submitted their applications, which must be submitted by the end of April, it will be up to the European Commission to assess and validate the applications.
