Miranda Sarmento: “We will not be the quickest” to respond to NATO’s challenges

“We will not be the fastest, but we will not fall behind either. The country cannot fall behind in this matter, that would be critical, especially because Portugal defends a huge border in Europe, the North Atlantic border,” said Finance Minister Joaquim Miranda Sarmento in an interview with Lusa news agency.

A few days before the North Atlantic Treaty Organization (NATO) summit – marked by strong geopolitical tensions in the Middle East and Ukraine and the need to increase investment in defense – the minister assured “an increase in spending in the coming years” in accordance with the plan that Portugal will present at the event and which foresees reaching the target of 2% of the Gross Domestic Product (GDP) this year.

“We will naturally have to implement increasingly rigorous budgetary management to ensure three things: that we strengthen our defense capacity, that we maintain and improve the level of social protection and our welfare state, and that we maintain the balance of public accounts and the reduction of public debt,” said Joaquim Miranda Sarmento.

Pointing out that “this management has been carried out and will continue to be carried out”, the minister indicated without specifying that this “naturally involves being increasingly judicious in the choices that are made”.

Asked whether this would involve changing the current accounting, Joaquim Miranda Sarmento indicated that Portugal will follow the NATO expenditure concept, but will “identify whether there are any expenses that already exist in other ministries […] and that are not currently being recorded”.

“There are some GNR expenses that are already in the concept” without being accounted for and, therefore, “we are analyzing whether it is possible to extend an additional set of expenses”, he exemplified.

Furthermore, “we will naturally increase the country’s defense capabilities in its multiple aspects”, promised the minister, noting that a survey is already being carried out “cautiously and with weight and measure so as not to jeopardize the balance of public accounts”.

The 32 NATO allies will meet on Tuesday and Wednesday at a summit in the Dutch city of The Hague under the urgency of spending more on defense, hoping that there will be no war, but preparing for the worst, given the global geopolitical instability.

There is talk of a target of allocating 3.5% of the GDP of the 32 allied countries to traditional military spending (armed forces, equipment and training) and an additional 1.5% of GDP to dual-use, civilian and military infrastructure (such as cybersecurity, readiness and strategic resilience), an increase compared to the current target of 2%.

This is the proposal that NATO Secretary General Mark Rutte will take to the summit, but the percentages have not yet been finalised and the timeframe for reaching such expenditure has also yet to be defined, whether 2032 or 2035. “We will see with the evolution […] of the summit what we can decide”, Joaquim Miranda Sarmento told Lusa.

In Portugal, the government announced that it would bring forward the 2% of GDP target for defence to 2025. In 2024, Portugal invested around 4.48 billion euros in defence, approximately 1.58% of its GDP, which placed the country among the NATO allies with the lowest military expenditure – below the 2% target – according to estimates by the government and the organisation. Portugal will be represented at the summit in The Hague by the Prime Minister, Luís Montenegro, and the Ministers of Foreign Affairs and Defence, Paulo Rangel and Nuno Melo.