International Desk

The EU will suspend strict rules on public spending to allow governments to ramp up defence investments, the bloc's chief Ursula von der Leyen announced on Friday.

"I will propose to activate the escape clause for defence investments. This will allow member states to substantially increase their defence expenditure," the European Commission president said during a speech at the Munich Security Conference.

Some in Europe have been lobbying for more spending on defence since Russia's 2022 invasion of Ukraine, a push given renewed impetus by chiding from the new US government of President Donald Trump.

EU members are bound by spending rules obliging them to keep the public deficit below 3% of economic output and debt at 60% of GDP.

But the EU can suspend the rules in exceptional circumstances and crises, as it did during the coronavirus pandemic when states had to prop up their embattled economies.

"I believe we are now in another period of crisis which warrants a similar approach," von der Leyen said.

"Of course, we will do this in a controlled and conditional way."

French President Emmanuel Macron slammed the rules as "obsolete" in an interview with the Financial Times published on Friday.

"The financial and monetary framework we live in is outdated," Macron said. France is one of eight countries whose deficit was above 3% of GDP in 2023.

Italy had also been piling pressure on Brussels to tweak the rules, and welcomed von der Leyen's announcement on Friday.

"This is a first fundamental step in the right direction, which must also be followed by the establishment of common financial instruments," the Italian government said.

In March, von der Leyen's commission will publish proposals for the future of European defence, including how to finance such investments.