Sánchez raises the stakes with Von der Leyen: three key points about Spain's increased military spending

MadridPedro Sánchez has set himself a new mission in Europe: to ensure that military spending does not incur unaffordable costs in Spain, where the arms race is generally frowned upon. The Spanish president must balance his NATO commitments to meet the 2% of GDP target—"We are prepared to meet it, we will," he reiterated this Wednesday from Helsinki—and, at the same time, ensure that it does not appear to be detrimental to social spending. This is a demand put forward by left-wing parties in Congress—Sumar, ERC, EH Bildu, and Podemos—who will sooner or later be needed to approve a new budget, whether now or in 2026.

Hold a substantive debate

PSOE and Sumar agree that it is necessary to rethink the idea of security

Beyond the political positions expressed in public, private sources within the Spanish government assert that the positions of the PSOE and Sumar regarding the debate on military spending are more aligned than they appear. This Wednesday, speaking from Finland, Sánchez insisted on the "360-degree" approach to security. What does this mean? That talking about defense is talking about security, and security also means defending against the energy crisis and climate catastrophes. Sánchez's challenge is to ensure that this broader vision of defense is accepted within the European Union, and he argues that the needs of southern countries, such as Spain, Portugal, and Italy, are not the same as those of the Nordic and Baltic countries, where a military problem does exist. traditional Spain's military spending is not just a problem, but a problem with its borders with Russia. In this regard, Spain is seeking to broaden the criteria for what counts as military spending to include other areas, such as cybersecurity and the fight against terrorism, so that the figure of 1.28% of Spain's GDP that NATO recognizes for 2024 will grow on its own.

How to finance rearmament

A European defense and joint debt

Party groups such as Sumar and Esquerra reject the need to spend more on defense and talk about spending "better." Sánchez also said this on Wednesday. "We must define what the real threats are coming from the east and the south. And how we finance capabilities," the Spanish president stated, in words almost identical to those echoed by Yolanda Díaz's entourage. The first approach is that if, instead of thinking of 27 military infrastructures, forces were joined in a European defense system, efficiency levels would multiply. The idea of a European army, which requires handing over more political power and sovereignty to Brussels, is met with reluctance on the far right and far left.

Secondly, the head of the Spanish government has been emphatic in defending the issuance of Eurobonds that are not loans—the governments of the member states should repay them—but aid—financed through the EU budget—such as those for the pandemic, for the countries that need it most. "Perhaps there are Finns who will say, 'Now someone from the south comes and asks for subsidies,' but I'm asking for aid for the eastern European countries. The proposal is that subsidies be sent to the Baltic countries, the Nordic countries, those closest to the Russian border. Defense and security are European public goods, and that's why resources like this are necessary.

This approach clashes with what European Commission President Ursula von der Leyen has proposed so far. She has spoken of eurobonds in the form of loans, although she has expressed a willingness to listen to other ideas. The so-called frugal countries tended to reject Sánchez's plan for them to contribute more resources to the EU budget, but now some are even open to accepting it given the risk they see on the European Union's borders. "We are open to all types of solutions. We need financing, not just loans. We are prepared to study proposals from the Commission. It is essential to use common funds when it affects the entire EU," agreed Finnish Prime Minister Petteri Orpo. A third option is for the European Investment Bank (EIB), led by former Spanish Vice President Nadia Calviño, to also finance military projects. In fact, Calviño is meeting with Sánchez this Wednesday in Luxembourg.

The Arithmetic of Congress

Sánchez and Feijóo meet at Moncloa a year and a half later

Before attending next week's European Council, Sánchez will receive the leader of the People's Party (PP), Alberto Núñez Feijóo, at the Moncloa Palace this Thursday to address the debate on defense spending. Broadly speaking, this is not an issue that divides the two major Spanish parties, although the conservatives are willing to oppose any issue and want to exploit the criticism the PSOE is receiving from its theoretical left-wing allies. Spanish government sources report that it is still too early to know whether Congress will have to approve any short-term budgetary deviation for defense: a credit increase would have to be voted on in the Lower House, unlike transfers between ministries or the use of the contingency fund, although this resource is "taxed" and must be justified, they point out.