EU fiscal board: Exceptions to new EU fiscal rules put credibility at risk
SPY•Debt levels remain elevated across the EU
The exemptions, first offered in March 2025, take the form of National Escape Clauses (NECs), which allow temporary departures from fiscal targets to accommodate higher spending. One was used for defence, and another, in 2026, to cover some energy-resilience measures.
The criticism comes as EU countries face mounting pressure to increase spending on defence, energy security and the green transition while also coping with rising debt servicing costs after years of elevated borrowing.
The report found that, despite stronger-than-expected economic growth in 2025, fiscal positions across the EU improved far less than envisaged in countries' fiscal plans. EU government debt rose to 82% of GDP in 2025 from 81% a year earlier, according to Eurostat, and the Commission forecasts it will exceed 84% in 2026.
