Germany Seeks EU Borrowing Limit Exemption for Defense Boost

Germany aims to request an exemption from EU borrowing limits to increase defense spending without violating rules. The European Commission's proposal to allow a 1.5% GDP increase in defense spending is widely supported across the EU. Germany's new coalition government prioritizes economic growth and rebuilding the economy.

Germany is poised to ask the European Commission for an exemption from EU borrowing limits to ramp up defense spending while adhering to EU rules, German Finance Minister Joerg Kukies announced. This move is part of the discussions within Germany's government and coalition parties.

The European Commission's plan, which permits member states to raise defense spending by 1.5% of GDP for four years without triggering disciplinary actions, aims to boost EU defense investments significantly. This initiative seeks to fortify EU defenses against potential Russian threats, with Germany's parliament previously approving a substantial defense budget increase.

Germany's fiscal strategy, involving a 500 billion euros fund for infrastructure, aims to largely exempt defense investments from borrowing caps. Kukies highlighted that Germany is open to common European financing, provided it is targeted at true joint military projects, as they work to invigorate economic growth and secure international trade deals.

(With inputs from agencies.)