Portugal Defence Minister Nuno Melo recently made serious allegations against the previous government. Melo accused the former Socialist Party (PS) administration of reporting inaccurate defence spending figures to NATO and inflating them by about €300 million. This news has caused significant debate in Portugal. It highlights the country’s ongoing struggle to meet NATO’s spending targets while balancing other national financial responsibilities.

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Nuno Melo Allegations On Socialist Party For Defence Spending

During a meeting with Portugal’s Budget, Finance, and Defense committees, Melo told them about the supposed difference. According to what he said, Portugal was spending 1.48 percent of its GDP on defense according to the former government. Melo said that the real amount in 2023 was about 1.34%, which is a lot less than what was said.

Melo said:

I am very sorry to have to tell you that the figure reported by the PS government to NATO is not true

This gap translates to around €300 million less in defence investment than reported to NATO. Melo expressed regret at having to bring this information forward. He emphasized that the current administration must now fill this gap to meet NATO’s requirement of 2% of GDP for defence by 2029.

Challenges Of Meeting NATO’s Spending Target

Spending on defence is a priority for NATO countries. NATO asks its members to dedicate 2% of GDP to defence to ensure the security of all members. Portugal’s commitment to this goal shows its support for NATO’s objectives. Reporting accurate spending is vital because it affects NATO’s plans and use of resources.

When Portugal’s defence spending was revealed to be lower than reported and it raised concerns both in the country and within NATO. The discrepancy highlights how difficult it can be for some countries to meet NATO’s targets especially when they are also facing other budget demands.

Melo’s Comparison With Past Defence Expenses

Melo compared the €300 million gap with other recent defence expenses to show its significance. Portugal spent €3 million to remodel the Sagres School Ship which trains naval cadets. This seems like a large amount but it is only a fraction of the €300 million gap. He also noted that €150 million has been added to military salaries and benefits that is still only half the shortfall.

These examples highlight how serious this missing amount is for Portugal’s military. Melo made it clear that this discrepancy represents a lost chance to boost the country’s defence capabilities. The current government now has to make up for this gap to meet NATO’s requirements.

The €300 million gap was reportedly caused by two main issues in how the previous administration calculated defence spending.

First, there is the principle of the onerousness of buildings. This refers to a €160 million sum that the Portuguese Armed Forces owe to the Treasury as rent for barracks and other buildings.

According to Melo, this practice creates an illusion of higher defence spending because it involves an internal transaction that does not improve actual military resources. Although NATO rules permit this but it inflates spending figures without real gains for the military.

Second, the shortfall involves a provision in the Military Programming Law (LPM) that sets targets for defence investment. This law required the military to raise €87 million by selling unused properties and counting this income as part of defence spending.

However, Melo argued that this target was unrealistic and that the revenue goal from property sales was not met. Together, these issues contributed to a report that looked more favorable than the reality.

Public Response And Political Impact

Melo’s remarks have sparked strong responses in Portugal. The Socialist Party which led the former government defended its actions. PS member Luís Dias suggested that the discrepancy might be due to changes in Portugal’s GDP but Melo dismissed this explanation. He clarified that the GDP change had no effect on the defence figures.

For the Portuguese public, this controversy has brought attention to the importance of clear government spending. Portugal faces financial difficulties like many countries. The nation’s struggle to meet defence spending targets while supporting other priorities has raised concerns about transparency and responsibility.

New Budget Strategies To Strengthen Portugal’s Defence Industry

Melo’s statement on past discrepancies is concerning but he also shared the government’s future plans for defence. Melo highlighted Portugal’s goal of developing its domestic defence industry to produce arms and supplies. This move will improve national security and boost Portugal’s economy.

Prime Minister Luís Montenegro recently supported this plan while speaking in Budapest. He shared that Portugal aims to strengthen its defence industry as part of a larger international network.

The government’s new budget includes €479 million to modernize the Armed Forces in 2025. This funding will support new equipment and technology and showing its commitment to both NATO’s targets and Portugal’s own defence needs.

The government’s proposed spending reflects a new strategy for defence in Portugal. This approach focuses on sustainable and long term growth. For example, the €479 million budget allocation includes purchasing A-29 Super Tucano aircraft made by Embraer. These aircraft are NATO-certified which will allow Portugal’s defence industry to participate in their development.

The Super Tucano planes can support ground forces and train pilots. The investment plan looks beyond immediate spending goals. By strengthening its defence industry, Portugal aims to make a meaningful contribution to NATO and reduce its reliance on foreign suppliers.