Published by Global Banking & Finance Review®
Posted on February 17, 2025
2 min readLast updated: January 26, 2026
German Finance Minister Joerg Kukies suggests reforming EU fiscal rules to accommodate higher defence spending, as European leaders meet to discuss the issue.
By Maria Martinez
BERLIN (Reuters) - European and German fiscal rules would need to be reformed if higher defence spending was agreed among European partners, German Finance Minister Joerg Kukies said on Monday.
"It brings little to only change one without changing the others, because the additional defence spending affects both sets of rules," Kukies said in Brussels, referring to both national and EU rules.
Senior European leaders are meeting in Paris on Monday. They will discuss how to respond after U.S. President Donald Trump unexpectedly said he could meet soon with Russian President Vladimir Putin to talk about ending the war with Ukraine.
In parallel, European finance ministers are meeting in Brussels and discussing, among other topics, how higher defence spending could be financed.
German Chancellor Olaf Scholz has proposed adapting European debt rules for a limited time and only to allow for exceptions on defence expenditure that goes beyond the 2% quota set by the NATO military alliance.
"It would be a targeted reform," Kukies said in Brussels.
The finance minister said that defence cannot be permanently financed with additional debt and that many countries have shown that it is possible to comply with NATO requirements from regular budgets.
"We talk about an adjustment path and a temporary transition, not a permanent solution," Kukies said.
The new EU fiscal rules became effective in April last year and were negotiated in Brussels by former finance minister Christian Lindner.
(Reporting by Maria Martinez; editing by Matthias Williams and Bernadette Baum)
The article discusses the need for reforming European fiscal rules to accommodate higher defence spending, as proposed by German Finance Minister Joerg Kukies.
Fiscal reform is needed to align national and EU rules with increased defence spending, ensuring compliance with NATO requirements.
Chancellor Scholz proposed temporarily adjusting European debt rules to allow exceptions for defence spending beyond the NATO quota.
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