At its Thursday meeting, the government approved a mandate authorizing Minister of Finance Jürgen Ligi (Reform) to request permission from the European Union to exceed the 3 percent budget deficit cap in order to increase defense spending.
Based on the government’s decision, Ligi may submit a request for Estonia to invoke the escape clause of the Stability and Growth Pact — the so-called Maastricht Treaty — which allows temporary deviations from budget rules in the case of national defense spending or other crisis situations and extraordinary expenditures, the government’s press office said.To ensure fiscal discipline, the EU has set limits for its member states, capping a member state’s budget deficit at no more than 3 percent of gross domestic product (GDP) and its public debt at no more than 60 percent of GDP.These thresholds may only be exceeded with permission from the European Commission, which is responsible for monitoring compliance with EU rules.
European Commission President Ursula von der Leyen proposed the broad application of the escape clause at the beginning of March, when she presented options for increasing defense spending across Europe.
Read more: ERR.EE
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