Lisbon, April 17, 2025 (Lusa) - Portugal's defence minister said on Thursday that debt mutualisation at the European level could be "crucial for financing rearmament in the short term" and insisted on the need to "reduce bureaucracy" in public procurement rules in the sector. "The mutualisation of debt, already advocated by Draghi, could be crucial for financing rearmament in the short term. In urgent contexts, this type of investment justifies recourse to debt, with a positive impact on GDP (via public consumption)," said Nuno Melo, speaking at the 3rd Draghi Report Conference - Security and Defence, organised by the newspaper Eco. However, the minister continued that "its continuity in the medium and long term may require a restructuring of public spending, avoiding unsustainable pressures due to the growing weight of debt servicing". Debt mutualisation was one of the "three key ideas" in the report on Europe's competitiveness, drawn up by former Italian prime minister Mario Draghi, that Nuno Melo highlighted in his speech, along with changes to public procurement rules. "We have been vocal on this issue. Defence is a public consumption sector (less competitive), with specific rules where security and national interest take precedence over competition. He emphasised that we want to change public procurement rules, reinforcing transparency and control of acts, but reducing bureaucracy and simplifying procedures. The president of the CDS-PP also stressed that this report "has diagnosed that there is a lack of competitiveness and that Europe risks falling behind in these areas, compromising the defence of our values, way of life and economic and social development", warning that "Europe needs to lead again - “make Europe lead again” - in innovation, in the mobilising agendas (of the digital and green transition), and in security". Nuno Melo pointed to the instability of the current international context. With the war in Ukraine, China asserted itself as a "global power and rival of the United States of America", a country that, in turn, has "reduced its role in NATO" and imposed taxes that "threaten global growth and free trade". He continued that Europe has discovered "the importance of re-industrialisation based on innovation" and the need to strengthen the European Defence pillar in NATO to compensate for "years of dependence on the US effort". Nuno Melo argued that the increase in investment in Defence is not just the result of international commitments, since the industries in this sector "play a strategic role" in modernising the Armed Forces and "strengthening the country's economy". The minister said that what is at stake is a universe of 380 companies, 40,000 jobs, representing 2.5% of exports, "with exports and salaries twice as high as the average, as well as investing more in research and development, and being more productive". "Recent indicators show that the Defence industries already represent more than Autoeuropa's weight in the economy. And the expanding aeronautics cluster is already worth €1.7bn. For this purpose, the investment increase in Defence began before the Draghi Report," he said. Nuno Melo gave as an example the government's investment of €200 million in the acquisition of twelve A29 Super Tucano aircraft and a flight simulator from the Brazilian company Embraer, "of which €75 million will be invested in Portuguese industry" which will reconfigure the aircraft to NATO standards. "In the Ukraine aid plan, we invested €52 million in the UK-led initiative to purchase drones, but they will be drones produced in Portugal, in a sector where we are leading the way globally," he added. ARL/ADB // ADB. Lusa