Austria can spend billions on buying new equipment for its military, even though the budget deficit is soaring and the country is under a European Union deficit procedure.
Today, the bloc’s Ecofin Council – which comprises the economics and finance ministers of all EU member states – granted Austria a so-called national escape clause. This allows the country to take on extra debt for rearmament without being sanctioned by the European Commission.
Finance minister Markus Marterbauer (Social Democratic Party, SPÖ) had applied for the exemption in December 2025. The EC had previously recommended that Austria increase its defence spending.
The clause remains in force for four years and allows Austria to incur an extra deficit of 1.5 per cent of gross domestic product (GDP). In 2025, its budget deficit amounted to 4.5 per cent of GDP or €14.4 billion, according to the latest Federal Ministry of Finance estimates, well above the EU’s 3 per cent threshold.
The extra debt may only be used for defence spending. All other expenditure still falls under the EU’s deficit procedure.
In July 2025, the EC had opened a deficit procedure against Austria as the country’s three-party coalition government was unable to present a credible path towards deficit reduction.
Austrian defence minister Klaudia Tanner (Austrian People’s Party, ÖVP) welcomed the Council’s decision, saying: “Investments in the Austrian Armed Forces and their equipment are investments in the security of our country … It is appropriate that these expenditures are not considered entirely relevant with regard to the Maastricht criteria. If we want to make the army capable of defending our country, these investments are absolutely necessary.”
Tanner added that Austria planned to boost defence spending to two per cent of GDP by 2032.
The country has already announced several big acquisition plans. In November 2025, the defence ministry signed a contract with Italian defence contractor Leonardo over the delivery of twelve M-346FA fighter jets for a total of €1.5 billion.
Furthermore, Austria will replace its ageing fleet of military transport planes with four C390 planes from Brazilian producer Embraer for a total of about €600 million.
Other acquisitions include twelve Black Hawk helicopters for €720 million, new air defence systems for €700 million and a modernisation campaign for the country’s tank fleet for around €760 million.
