Baltics agree on need to raise defense funding to 3% of GDP

  • 2022-12-09
  • LETA/BNS/TBT Staff

VILNIUS – The three Baltic countries agree on the need to raise defense spending to 3 percent of GDP, but they plan to achieve the target at different times.

"We'll increase our defense investment toward 3 percent of GDP each country individually," Latvian Prime Minister Krisjanis Karins told reporters after meeting with his Lithuanian and Estonian counterparts in Riga on Friday. 

However, Karins did not elaborate on when Latvia, which currently spends 2.2 percent of its GDP on defense, could reach the target.

Meanwhile, Lithuanian Prime Minister Ingrida Simonyte said that her country might achieve it next year.

The Lithuania government's "2023 budget sets a funding floor," but it "provides for additional spending and the possibility to increase it if there is room in the deficit to do so", she told reporters in the Latvian capital.

The 2023 budget, adopted by the Lithuanian parliament in late November, allows raising defense spending up to 3 percent of GDP through borrowed funds, provided that the overall general government deficit for the year does not exceed 4.9 percent of GDP.

However, Simonyte noted that Lithuania will have to carry out a number of defense-related projects next year, meaning that actual defense spending could reach the limit.

"Next year, we will have to implement a number of projects related to military mobility projects (and) host nation support, which under NATO's standards are not included in the defense (spending) percentage, but that will be expenditures directly related to Lithuania's defense and security," the prime minister said. 

"This means that the real spending on Lithuania's defense and security will be between 2.5 and 3 percent of GDP in any case next year," she added.

If Lithuania does not borrow for defense needs next year, its allocations specifically for defense will account for 2.52 percent of GDP, unchanged from this year.

Estonian Prime Minister Kaja Kallas said that her country will surpass the 3 percent of GDP target in two years.

"As to Estonia's defense budget, it will exceed 3 percent in 2024," she said. "Our trajectory has been mapped out, as have our purchases", she said.

Estonia's defense budget is expected to rise to 2.9 percent of GDP next year, from 2.3 percent currently.