European and German fiscal rules need to be reformed if higher defense expenses are agreed upon among European partners, German Finance Minister Joerg Kukies said on Monday.
“This only brings a little to change one without changing the other, because additional defense expenses affect the two sets of rules,” said Kukies in Brussels, referring to national and EU rules.
European senior leaders met in Paris on Monday. They will discuss how to respond after US President Donald Trump unexpectedly said he could immediately meet with Russian President Vladimir Putin to talk about ending the war with Ukraine.
In parallel, the European Minister of Finance met in Brussels and discussed, among other topics, how higher defense expenses can be financed.
German Chancellor Olaf Scholz has proposed to adapt European debt rules for a limited time and only to allow exceptions to defense expenses that exceed the 2% quota set by the NATO military alliance.
“This will be a targeted reform,” said Kukies in Brussels.
The Minister of Finance said that defense could not be permanently financed with additional debt and that many countries had shown that it was possible to comply with NATO requirements from the regular budget.
“We are talking about the temporary adjustment and transition pathway, not a permanent solution,” Kukies said.
The new EU fiscal rule became effective in April last year and was negotiated in Brussels by former Finance Minister Christian Lindner.
Source: Reuters
