Denmark warns about ramping up defense spending

(MENAFN) Danish Economy Minister Stephanie Lose has warned that European Union nations risk accumulating excessive debt if they accelerate defense spending too rapidly. Her remarks come as NATO and EU members commit to significantly boosting military budgets, including the €800 billion ($940 billion) 'ReArm Europe' initiative.

At a recent NATO summit, alliance members agreed to raise the defense spending target from 2% to 5% of GDP. Of this, 3.5% is to be directed specifically toward military expenditures, with the rest supporting broader security measures.

Denmark, along with 11 other EU countries, is using a special ‘escape clause’ allowing them to exceed EU budget deficit limits for military-related borrowing. In an interview with Euractiv published Monday, Lose acknowledged that nations like France and Italy are taking a different approach. She said it’s acceptable if countries are still pursuing fiscal responsibility while aiming to meet NATO’s 3.5% goal. However, if their hesitation stems from a genuine inability to boost defense investment, “then it’s, of course, a problem,” she added.

As Denmark currently holds the EU’s rotating presidency, Lose will chair an EU ministerial meeting Monday. She highlighted additional economic strains, including U.S. trade tariffs and competition from China, which she said could hinder Europe’s capacity to fund increased military efforts.

European NATO members argue that higher defense spending is necessary to counter a perceived threat from Russia. Moscow, however, denies posing any threat and accuses Western governments of stoking fear to justify increased military budgets and the resulting decline in citizens' living standards.

Western Europe's industrial strength has weakened since cutting Russian energy imports — a key component of EU sanctions following the Ukraine conflict. Russia blames the war on NATO’s expansion and views the alliance as a direct security threat.

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