As the EU seeks to secure substantial funding for defense, it is rethinking its strict definition of military spending. At an upcoming summit, member states will commit to strengthening military capabilities amid evolving security challenges. To promote investment, defense spending will be temporarily exempt from deficit limits. The definition will expand to include dual-use items and broader categories of defense-related expenses, aligning more closely with NATO standards, though interpretations vary among member states.
Revamping Military Spending in the EU
By Jan Strupczewski
As the European Union (EU) faces the pressing need to secure hundreds of billions of euros for bolstering defense, Brussels is rapidly reevaluating its definition of military expenditure, which was previously quite rigid.
During an upcoming summit in Brussels, the leaders of the 27 member countries are anticipated to pledge their commitment to enhancing military and economic strength in response to the evolving uncertainties in trade and security, particularly concerning relations with the United States under Donald Trump. They will also reaffirm their ongoing financial and military support for Ukraine.
To facilitate increased military investments viewed as essential for safeguarding against potential threats from Russia along its eastern borders, the EU will temporarily exempt defense spending from its deficit ceiling regulations for the next four years.
While this additional funding aims to address years of underinvestment in Europe’s security framework, it can only be sanctioned if all member states reach a consensus on what constitutes defense spending.
Prior to a recent rule change endorsed by finance ministers, expenditures such as the establishment of a munitions factory were categorized as construction costs rather than defense spending. This became evident when Poland initiated a project to build a factory valued at 5 billion zloty (approximately 1.2 billion euros).
Historically, the EU’s definition of defense spending has been somewhat narrow, focusing solely on delivered equipment like tanks, aircraft, and firearms, while excluding expenses related to training, hiring, and compensating personnel such as tank crews, pilots, and mechanics.
This limited scope is set to broaden, as the EU prepares to include a wider range of defense-related products in its definition, embracing ‘dual-use’ items that serve both military and civilian purposes.
Examples of these dual-use applications include enhancing infrastructure such as roads and bridges for tank movement, and the manufacturing of drones, helicopters, satellites, radars, and underground shelters.
Expanding the Definition of Defense Spending
This expanded definition aligns more closely with NATO’s standards for defense spending, which encourage member nations to allocate at least 2% of their gross domestic product (GDP) to military-related expenditures.
However, NATO permits considerable interpretation by its members regarding what qualifies as defense spending.
“The discussions around this topic have been extensive, and we now see specific member states proposing their own interpretations of what should be included in defense spending,” remarked a senior EU official.
For instance, Italy’s ultra-conservative government seeks to broaden the definition to encompass costs associated with managing the influx of North African migrants. However, European officials have indicated that this request is unlikely to be accepted, as border protection can only be categorized as ‘defense’ if it pertains to military facilities designed to thwart invasions, not expenses related to sea patrols for intercepting migrant vessels.
Similarly, Spain, which is far removed from the EU’s eastern borders, has proposed that projects related to climate change be included in the defense spending category, a suggestion that has also been dismissed by European authorities.
While general cybersecurity is not classified under the defense umbrella, computers procured by the military to combat cyber threats may qualify.
“The key criterion is that it must be directly relevant to defense,” stated another senior EU official.
(French version by Diana Mandiá, edited by Blandine Hénault)