This article is co-authored by Dr. Nils Redeker, Deputy Director of the Jacques Delors Centre, and Lucas Guttenberg, Director of the Europe Programme at Bertelsmann Stiftung, and was published in Wirtschaftsdienst in April 2025 (in German).
Although the new EU fiscal rules improve the macroeconomic logic and differentiation, they offer very little leeway for urgently needed, debt-financed defence spending. However, the EU Commission‘s proposal to solve this via flexible escape clauses undermines the credibility of the rules. A new reform is necessary: defence spending above 2% of GDP should be exempted for a limited period of time and growth-promoting investments in countries with moderate levels of debt should be facilitated. This is the only way to reconcile security, fiscal stability and regulatory compliance in the long term.
Redeker, N.; Guttenberg, L.: “Für mehr Sicherheit: Warum und wie die EU die Fiskalregeln (noch einmal) reformieren sollte”. In: Wirtschaftsdienst, 2025, 105(4), 243-248