Published by Global Banking and Finance Review
Posted on April 29, 2025
ATHENS -Greece will ask the European Commission to exempt its 2026 defence spending from the EU's budget rules as part of the so-called fiscal escape clause, its finance minister said on Tuesday.
The country will submit a request later on Tuesday seeking to exempt defence spending worth 500 million euros ($569.60 million) earmarked for 2026, less than 0.3% of its GDP, Finance Minister Kyriakos Pierrakakis told public broadcaster ERT.
The European Commission has proposed allowing member states to raise defence spending by 1.5% of gross domestic product (GDP) each year for four years without any of the disciplinary steps that would normally kick in once a deficit rises above 3% of GDP.
Greece, a member of the European Union and NATO, already spends about 3% of its gross domestic product on defence. That is nearly double the average in the EU, which is under pressure to boost defence spending as Europe's 75-year-old alliance with the United States comes under strain.
Greece emerged from a 2009-2018 debt crisis that cut a quarter of its output and its economy is now outpacing its euro zone peers. The country achieved a primary budget surplus of 4.8% of output last year, beating the government's estimate.
Athens aims to spend 25 billion euros by 2036 as part of a multi-year defence plan to modernise its armed forces and as it tries to keep pace with its historic rival Turkey.
($1 = 0.8778 euros)
(Reporting by Angeliki Koutantou; Editing by Kate Mayberry)
