Source: European Parliament
The classification of the functions of government (COFOG) is a classification of transactions designed to apply to general government and its subsectors.
In the current version of the COFOG classification, which is used both globally and in Europe, there are 10 divisions, including division 02 Defence.
The classification is centred on primary purpose of government expenditure. Thus, division 02 Defence captures all government expenditure with primary purpose of supporting and developing defence capabilities, but it excludes expenditure and investment that has other primary purposes, like climate change.
The activation of the national escape clause of the Stability and Growth Pact for defence[1] was justified by the exceptional circumstances created by Russia’s aggression of Ukraine and its major impact on Member States’ public finances.
The activation is framed in scope, size, and time to cater for a quick transition to a higher defence spending regime while preserving fiscal sustainability.
Member States should use the financial assistance provided under the Security Action for Europe (SAFE) Regulation[2] to carry out common procurements. Eligible defence common procurement should relate to the list of priority areas identified by Article 1 of SAFE Regulation.
In addition, Article 16 sets out eligibility conditions applying to contractors, subcontractors and products participating in common procurement supported by SAFE.
Therefore, to be supported under the SAFE instrument, investments also contributing to tackling climate change need to fall into one of the areas identified in Article 1 of SAFE Regulation and be channelled through common procurement, which complies with the eligibility conditions set out in the regulation.