Germany called for the European Union to reform its fiscal rules to allow countries to make bigger defense expenditures without running afoul of the bloc’s budget rules, according to people familiar with the talks.
Germany is urging the EU to ease fiscal rules to allow for increased defense spending in response to geopolitical circumstances, a significant shift for the country. This proposal, discussed at an EU summit, involves amending the constitution to exempt defense spending from fiscal limits and potentially changing EU fiscal rules permanently. The EU is considering mechanisms for additional defense spending, including loans to member states, to counter Russian aggression and compensate for reduced U.S. commitment to European security.
