Portugal calls for joint EU funding for defence spending

LISBON (Reuters) - The European Union needs common instruments to fund defence spending amid a protracted war in Ukraine and calls from Washington for NATO members to increase such expenditure, Portugal's finance minister said on Monday.

"All together we must find solutions, just as we did in the financial crisis, the sovereign debt crisis, during the pandemic, with inflation", Joaquim Miranda Sarmento told reporters.

U.S. President-elect Donald Trump has challenged NATO members to boost defence spending to 3% of economic output compared to their present target of 2% of GDP, which is yet to be met by some alliance members, including Portugal.

The alliance estimates only 23 of its 32 members will meet the 2% target this year.

Portugal, which spent 1.5% on defence last year, expects to reach that threshold only by 2029.

Miranda Sarmento warned that "the situation next year, particularly with the war in Ukraine, could force the (EU) member states to make a greater effort".

"Unfortunately the war is about to turn three and solutions have to be found mainly at a European level, with European instruments," he added.

Trump cut defence funding to NATO during the latter part of his first term, and has frequently accused European members of spending too little on defence.

During his election campaign he repeatedly said the U.S. would help protect NATO members from a possible attack by Russia only if European members spent more.

(Reporting by Sergio Goncalves; editing by Andrei Khalip and Christina Fincher)