Poland requests “escape clause” from EU fiscal rules to boost defence spending

Keep our news free from ads and paywalls by making a donation to support our work!

Notes from Poland is run by a small editorial team and is published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Poland has applied to the European Union for a so-called “escape clause” that would exempt it from budgetary rules in order to increase defence spending. It is the third member state to take advantage of the newly introduced measure, alongside Germany and Greece.

As part of efforts to boost Europe’s defence capabilities in response to Russia’s war in Ukraine and concerns over the alliance with the United States, the European Commission announced earlier this year that it would allow member states to exempt defence spending from the EU’s fiscal rules.

On Monday this week, Germany – whose incoming government wants to increase defence spending – became the first member state to seek to active the “escape clause”. It was followed on Tuesday by Greece, which is one of NATO’s biggest relative defence spenders.

On Wednesday, Poland’s finance ministry confirmed that it has now also submitted an application to take advantage of the clause.

“This does not create new space for spending,” finance minister Andrzej Domański told Polskie Radio. “However, thanks to it, we can avoid certain negative consequences of being in the excessive deficit procedure.”

The EU’s excessive deficit procedure is activated when a member state’s budget deficit exceeds 3% of its GDP or if the country’s public debt level goes above 60% of GDP. Poland is currently under the procedure after its deficit reached 5.1% of GDP in 2023 and is obliged to seek to bring down its deficit.

The new “escape clause” allows for a departure from the spending path recommended by the EU’s Economic and Financial Affairs Council (Ecofin) up to the amount of the increase in defence spending compared to the situation before the war in Ukraine, but no more than 1.5% of GDP.

According to estimates quoted by the Polish finance ministry, the increase in defence spending in Poland amounted to 1.1% of the GDP in 2024 and  will be 1.3% of the GDP this year, compared to the level from 2021.

Poland has significantly ramped up defence spending since Russia’s full-scale invasion of Ukraine. Last year, it became the highest relative spender in NATO, dedicating the equivalent of 4.1% of GDP to defence. That figure is set to rise to 4.7% this year, with the government planning a further increase in 2026.

The EU expects more countries to apply to use its new mechanism which, according to the European Commission, should enable EU countries to achieve permanently higher defence expenditure while maintaining stable public finances.

Apart from encouraging the use of the escape clause, the EU has launched a plan enabling over €800 billion in defence spending, including €150 billion in EU-backed loans for member states to rapidly scale up investments.

Notes from Poland is run by a small editorial team and published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Main image credit: Sztab Generalny Wojska Polskiego/Flickr (under CC public domain)

Agata Pyka

Agata Pyka is an assistant editor at Notes from Poland. She is a journalist and a political communication student at the University of Amsterdam. She specialises in Polish and European politics as well as investigative journalism and has previously written for Euractiv and The European Correspondent.