Estonian government clears finance minister to seek EU deficit cap exemption

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. The proposal was approved by the leaders of the member states at their extraordinary meeting on March 6.
According to the plan, member states may exceed the 3 percent threshold by an additional 1.5 percent of GDP, provided that the amount is used to increase defense spending.
According to information available to the ERR, Estonia may submit its request before the end of April. Requests from member states will be consolidated in the European Council and submitted to the Commission in a coordinated manner.
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Editor: Mait Ots, Aili Vahtla