Lisbon (Brussels Morning Newspaper) – On Wednesday, the finance ministry announced that Portugal plans to request the European Commission to implement the fiscal escape clause, enabling an increase in defence spending up to 1.5% of its gross domestic product. This makes Portugal one of the first member states to pursue this action.
European nations face pressure from U.S. President Donald Trump, who is urging NATO allies to increase military spending to as much as 5% and is hesitant to keep supporting Kyiv in the ongoing war in Ukraine.
The European Commission suggests that member states be permitted to increase defense spending by 1.5% of GDP annually for four years, exempting them from disciplinary actions typically activated when a government deficit exceeds 3% of GDP.
This initiative is part of a strategy to mobilize nearly 800 billion euros ($910.80 billion) aimed at enhancing Europe’s defense industry and boosting military capabilities. According to a statement from the finance ministry, Portugal’s centre-right caretaker government has engaged with the main opposition Socialist Party prior to deciding to activate the clause.
Can Portugal reach NATO’s 2% defense goal early?
Previously, Portugal announced its intention to expedite planned hikes in defense spending, currently among the lowest in NATO, in order to achieve the alliance’s two-percent of GDP minimum by 2029.
However, neighboring Spain, at the bottom of the NATO members’ defense spending rankings in proportion to output, refused to alter its timeline for reaching the two-percent target by 2029 during a visit from alliance chief Mark Rutte.
Portugal announced this following the return of US President Donald Trump, who often criticizes European allies for insufficient military investment. The unpredictable Republican has previously questioned if the United States would defend NATO members who fail to meet the spending benchmark, which he recently proposed should be increased to five percent of GDP.
At last summer’s NATO summit in Washington, Lisbon pledged to achieve the two-percent threshold by 2029. Portuguese Prime Minister Luis Montenegro stated that his country was
“ready to expedite our investment timetable in this area even further.”
