Belgium warns defense spending boost will hurt welfare state

Major increases in defense spending will lead to welfare cuts, cautioned Belgium's Budget Minister Vincent Van Peteghem.

“Every euro that’s a deficit today ... is a euro that will be debt, and that debt will be one day a tax or a cut and in the social welfare state," he told the Financial Times. "Defense definitely requires our full attention, but so does also the sustainability of our welfare state."

Last week in Brussels, U.S. Secretary of State Marco Rubio called for NATO allies to spend more on defense — even if it meant cuts to welfare programs. 

Van Peteghem's remarks come on the heels of a government agreement last week to spend 2 percent of GDP on defense and finally reach NATO's decade-old current target. Belgium will seek to activate the national escape clause — a mechanism authorized by the European Commission to loosen fiscal rules — and benefit from some of the €150 billion in loans offered by the EU's executive branch, he said.

Amid Russia's all-out war on Ukraine and increasing belligerence, NATO leaders are widely expected to raise the defense spending target to more than 3 percent of GDP during a June summit in The Hague. U.S. President Donald Trump, a frequent critic of European spendthrifts, wants 5 percent.

Belgium will ask NATO to count regional investments in roads and bridges as defense spending, Van Peteghem added, according to the FT.

Indeed, spending laggards such as Spain and Italy want to widen the definition of defense spending to include cybersecurity, the fight against climate change and border patrols, among other items. Countries bordering Russia such as Estonia and Finland have already said no to that, wanting cash to be focused mainly on the military.