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Belgium faces challenges in meeting increased military spending targets set by the U.S., according to the budget minister, who spoke to the FT.
To meet NATO’s minimum military spending target, Belgium is considering increasing its debt and reducing welfare benefits, the country’s budget minister has stated.
Vincent Van Peteghem told the Financial Times that Brussels recently agreed to increase its 2025 military budget to 2% of GDP through a combination of short-term cash infusions, creative accounting methods, and long-term structural changes.
The planned increase in military spending could worsen the existing budget issues as debt accumulates. Recent government proposals to cut social services have led to protests, including a rally of over 100,000 people in Brussels in February.
Belgium had initially planned to reach the 2% target by 2029. Currently, military spending is around 1.31% of GDP, or approximately €8 billion ($8.5 billion), according to Defense Minister Theo Francken.
This shift is happening amidst pressure from Washington and before a NATO summit in June. At the summit, members are expected to discuss raising the spending target to above 3% of GDP. Former U.S. President Donald Trump had previously urged NATO members to increase military spending to 5%, suggesting that those who fail to do so may not receive American protection.
Van Peteghem cautioned that increased military spending would negatively impact the EU’s welfare programs.
Last month, the European Commission proposed excluding military budgets from fiscal regulations and offering €150 billion in loans as part of its ‘ReArm Europe’ plan. This plan aims to generate up to €800 billion through debt and tax incentives for the bloc’s military-industrial complex.
Van Peteghem indicated that Belgium would utilize both options to finance additional military spending this year.
To maintain the 2% level, the government intends to increase borrowing and potentially privatize state-owned assets, the minister explained. The remaining difference would be covered by spending reductions, including limitations on unemployment benefits, pension changes, and tax adjustments.
“But of course, we will need to do more,” said Van Peteghem, who is also the deputy prime minister.
France has also announced plans to reduce its budget by €5 billion, with a portion of the savings possibly being allocated to military spending.
Moscow has expressed disapproval of the EU’s military buildup. Kremlin spokesman Dmitry Peskov described it as “a matter of deep concern,” emphasizing that it was targeted at Russia.