The Eurogroup commits to increasing investments in defense and controlling public spending.

Against the backdrop of an increasingly tense geopolitical context, the Ministers of Economy and Finance of the eurozone, gathered in the Eurogroup, have taken a step forward by committing to increase investments in defense in an effort to strengthen the security capabilities of the bloc. This decision comes at a time when the European Union (EU) is facing significant challenges, particularly in the face of Russia's aggression in Ukraine and perceived threats from the regime of Vladimir Putin. In a joint statement, the 27 member countries of the Eurogroup expressed their commitment to increase investment levels in common priority areas, such as the green and digital transitions, in addition to defense capabilities. This investment will be financed both with national resources and EU funds, including those from the Recovery and Resilience Mechanism. European Commissioner for Economy, Paolo Gentiloni, has proposed financing these defense improvements through a debt issuance system similar to that used in the Next Generation EU. Eurogroup President Paschal Donohoe has emphasized that defense spending is now a high priority and highlighted the widespread increase in EU countries' contributions to security. In addition to defense measures, the Eurogroup meeting also agreed on the need to control public spending in the 2025 Budgets, with the aim of strengthening fiscal buffers and being prepared for future economic crises. This measure seeks to support the disinflation process and reinforce fiscal sustainability in a context of economic uncertainty. The European Parliament is expected to approve the new deficit and debt rules in April, while Member States will need to present their adjustment plans for the coming years in September. In the case of Spain, it is estimated that the government will need to implement an adjustment plan of approximately 37 billion euros, which would include spending cuts and increased public revenues. Spanish Minister of Economy, Carlos Cuerpo, has acknowledged the need to reduce the deficit and debt, but has assured that the adjustments will be gradual, taking into account the specific conditions of each country and being compatible with investments and economic growth. Furthermore, Cuerpo has mentioned that the Spanish government is working on reforming unemployment benefits to meet EU requirements and receive the fourth installment of recovery funds, although he does not rule out that this payment may be partial if the reform is not completed.