Four models for defense financing are presented in Lithuania

  • 2024-03-18
  • BNS/TBT Staff

VILNIUS - Four possible sources of defense funding were proposed for consideration at a government meeting on Monday, held to discuss additional sustainable defense funding. They will now be further considered by the Tripartite Council.

Prime Minister Ingrida Simonyte says the assessment by the Tripartite Council and the Coalition of Non-Governmental Organizations will take a couple of weeks and then, if there is a basic proposal, it will be discussed by politicians.

"If after that we see that we already have a more serious basis we can continue working on with the help of politicians, and I hope that in the meantime the opposition will be kind enough to come back after having dispelled their doubts, which they expressed on Saturday, then we could already talk about a concrete proposal by the government," Simonyte told journalists on Monday after the meeting attended by representatives of the ruling coalition, businesses and trade unions.


The presented options are still under consideration and can be modified or merged, the prime minister said.

Under the plan, they would allow increasing defense funding to 3 percent of GDP, from the existing 2.5 percent.

"If we are talking about 0.5 percent of GDP, which is the anchor on which smaller things are hung, in one case, one of the proposals to the Seimas is on the change of the personal income tax, in other words, on the various tax breaks for individual activity and the progressive income tax rate," Simonyte said.

"In the second case, we are talking about the value added tax, in the third case, it is the corporate income tax, and in the fourth case, it is the sharing of the burden with municipalities and also additional tax revenues, plus the evaluation of all the tax breaks that we can discuss," she said.

According to the prime minister, the baseline requirement for increased funding is 3 percent of GDP, but if more money is needed for defense in a given year, it could be borrowed.

"However you look at the priorities and try to move them around, it is very difficult to deny the fact that we have a long-term need for 0.5 percentage points of additional funding for at least a decade, and the 3 or 3.4 percent of GDP emerging in certain years, depending on the progress of investment solutions, these waves may be dealt with through borrowing instruments to push them back to a sustainable level of 3 percent around 2030," the prime minister said.

She hopes the government will be able to agree on sustainable additional national defense funding with the opposition.

The latter's representatives were absent from Monday's meeting, saying that they did not see the point of negotiating defense funding following the recent resignation of the defense minister and before the appointment of a new one. Moreover, they said, the doubts cast by outgoing Defense Minister Arvydas Anusauskas about possible pressure from politicians on national defense officials regarding public procurement must first be dispelled.

After the meeting, representatives the Freedom Party and the Liberal Movement, both part of the ruling coalition, said they would discuss the proposals within the parties and hoped that the opposition would eventually get back to the negotiating table.