National economy EU Commission wants to allow more debt for energy transition
In view of the energy crisis caused by the Iran war, the European Commission wants to further relax the EU's debt rules. According to a proposal by the Brussels authority, higher debts should also be permitted in future for investments in the energy transition.
03.06.2026, 13:13
03.06.2026, 13:23
SDA
This expenditure should be able to fall under an existing exemption in the EU debt rules for defense spending, as the Commission announced in Brussels.
With this project, the EU Commission wants to enable more investment in the energy transition. This should include measures that have been implemented since February 2026 and reduce dependence on imported fossil fuels. In mathematical terms, Germany - Europe's largest economy - could then invest more than an additional 25 billion in corresponding energy projects. Theoretically, however, the new regulation could come at the expense of military rearmament.
More debt already permitted for military spending
Since last year, EU states have been allowed to exceed the debt ceilings for investment in armaments following a corresponding application. So far, Germany and around 15 other countries have made use of this exception and can spend up to an additional 1.5 percent of their gross domestic product (GDP) on defense over four years - without worrying about a so-called deficit procedure.
According to the EU Commission, a maximum of 0.3 percent of GDP can now be used within this framework in the current year as well as in 2027 and 2028, for example for the promotion of photovoltaic systems or investments in energy efficiency. An upper limit of 0.6 percent must be adhered to for the three years as a whole.
Germany's gross domestic product in 2025 was around 4.5 trillion euros - based on this, the new rule would allow more spending on the energy transition totaling 27 billion euros.
Does more energy spending mean less investment in armaments?
This would mean that armaments and energy spending would compete for the same financial leeway. There are therefore also concerns in Brussels that the original aim of the debt exception, the rearmament of the EU, could be lost sight of.
Against the backdrop of the Russian war of aggression, the EU Commission estimates that additional defense investments of around 500 billion euros will be required in the coming years. For this reason, a so-called national escape clause was agreed in Brussels last year, which is anchored in the EU debt limits.
This is because the EU actually has strict upper limits for the debt levels and new borrowing of member states in order to ensure sound finances. The rules stipulate that the debt level of a member state may not exceed 60 percent of economic output. At the same time, the annual deficit must be kept below three percent of economic output.
Italy in particular had demanded an exception
In order to be able to invest more public money in overcoming the energy crisis, Italy in particular had called for an exception to the strict EU debt requirements. In a letter to EU Commission President Ursula von der Leyen, head of government Giorgia Meloni spoke out in favor of a special rule like the one for defense spending. Spain also called for more flexibility in EU debt rules due to the energy crisis. The government is calling for certain energy and transformation spending for the green transition to be treated differently to normal government spending.
Crude oil prices have skyrocketed since the Strait of Hormuz, which is important for global trade, was effectively closed as a result of the Iran war. High energy prices are a burden on companies and consumers.
