Portugal Fails to Meet Defense Expenditure Goal
In the latest report, Portugal's military expenditure clocked in at 1.46% of its GDP, making it one of the NATO members lagging behind the 2% target. Joining Portugal in this club of underachievers are Canada (1.45%), Slovenia (1.37%), Luxembourg (1.30%), Belgium (1.29%), and Spain (1.24%).
The lion's share of Portugal's defense budget is allocated to personnel costs, amounting to approximately 58.6% of the 4 billion invested. This personnel-heavy approach is a shift from 2014, when personnel expenses accounted for a staggering 81.3% of defense investment, with the overall investment sum being lower at 2.263 billion.
Moving on, equipment acquisitions make up 19.5% of the total investment, a proportion that has more than doubled since 2014, when Portugal dedicated just 8.4% of its budget to this category. It's interesting to note that Portugal lags behind only Canada (17.8%) and Belgium (15.2%) in equipment spending, on a percentage basis.
Operations, maintenance, and other expenses account for almost 18% of the budget, a substantial increase from 2014, when they took up only 10.2%. The remaining 3.9% goes towards infrastructure.
Recently, the Ministry of Finance announced its intention to seek EU approval for a clause exempting defense-related expenses, up to 1.5% of GDP, from the imposed spending ceilings. Furthermore, these expenses wouldn't be factored into deficit calculations, either, a move aimed at further increasing defense spending. This decision has been agreed upon with Portugal's largest opposition party and the Socialist Party.
It's worth mentioning that NATO allies are currently debating an ambitious new target of spending up to 5% of GDP on defense, a proposal initially put forth by U.S. President Donald Trump. However, most European countries, including smaller nations like Portugal, would need substantial increases to meet this goal given their traditionally lower defense budgets.
- In addition to military expenditure, the Portuguese finance ministry is seeking EU approval for defense-related expenses, aiming to increase the percentage from the current 1.46% of GDP.
- Portugal's latest defense budget allocation shows that news regarding the country's military spending is not limited to NATO's 2% target, as changes in personnel, equipment, and other costs are also significant.
- General-news coverage about Portugal's business sector and politics might soon include discussions about defense financing, given the proposed changes in defense spending and the ongoing debate among NATO allies about a potential increase in defense spending to 5% of GDP.
