Brussels: EU Economy Commissioner Valdis Dombrovskis announced plans Wednesday to extend additional fiscal flexibility granted for defense spending to energy investments, citing the energy shock triggered by the war in the Middle East.

According to Anadolu Agency, Dombrovskis highlighted that member states can request to broaden the scope of the current National Escape Clause for defense to include energy investments. This announcement was made during a news conference presenting the European Semester 2026 Spring Package.

The National Escape Clause allows temporary departure from EU fiscal rules during exceptional circumstances. Dombrovskis mentioned that an annual cap of 0.3% of GDP could be applied to energy support measures within the existing 1.5% of GDP cap for additional defense spending. This measure will be available from 2026 to 2028, with a cumulative limit of 0.6% of GDP over the three-year period.

Dombrovskis further explained that for member states already using full flexibility to increase defense spending under the National Escape Clause, this adjustment allows them to exceed the 1.5% of GDP cap, pending an additional sustainability assessment. The flexibility will apply to measures undertaken from February 2026, specifically those aimed at reducing dependence on fossil fuels.

He emphasized that the flexibility does not cover support measures that subsidize fossil fuel use. Dombrovskis reiterated the recommendation for temporary and targeted measures, cautioning against sustaining fossil fuel demand due to the current supply shock, which cannot be addressed by stimulating demand.