In order to increase Latvia’s defence spending from the existing 3.45% of gross domestic product (GDP) to 5%, which has been suggested by several politicians, it is necessary to find more than half a billion euros, as reported by LTV programme De Facto.
The idea for NATO member states to increase defence spending to 5% of their GDP was suggested by US President Donald Trump on this second week of presidency. One day later, the idea to increase the country’s defence spending to 4% of GDP was voiced by Latvian top officials – President Edgars Rinkēvičs and Prime Minister Evika Siliņa.
Now politicians from the ruling coalition and the opposition have started talking about raising defence spending to 4% and 5% in the coming years, as reported by De Facto.
The programme mentioned that the needs to raise Latvia’s defensive capabilities were outlined before. However, the Ministry of Defence has been busy clarifying the list in the past several months. Updated plans are planned to be reviewed by the National Security Council in February.
Minister of Defence Andris Sprūds told De Facto that there are 26 areas defined so far, with infantry battle vehicles, anti-air defence, coast guard, firepower (rocket artillery, howitzer systems, equipment, munitions, as well as drones) listed as priorities. The minister stressed that investments necessary to defence are very large.
Following a request from De Facto, the Ministry of Finance estimated that 5% in 2026 would mean allocating EUR 2.34 billion towards defence spending, which is EUR 573 million more than what the current multi-year budget plan outlines.
The Ministry of Finance has started to look for possible solutions to this, but the Minister of Finance Arvils Aseradens (JV) does not want to name the potential solutions yet, says “De Facto”, noting that the Minister of Finance has rejected the possibility of growing defence spending at the expense of the budget deficit – even if the European Commission allowed deviations from the established criteria for these purposes. As the minister explained to the programme, it may have an echo for debt servicing expenses.
The Ministry of Finance has started a detailed analysis of the actual expenditure of the budget of the sectoral ministries and other institutions for 2024 in order to identify the overall financial situation by sector and to use it as a basis for the analysis and reallocation of planned expenditure, including an increase in defence funding.
On the 8th of January, after meeting with the PM, the Latvian President told journalists that Latvia will need to increase defence spending to approximately 4% of GDP in the coming years.
The President expressed satisfaction that the remuneration of those working in the home affairs system has increased this year. It is also positive that borders and the construction of military infrastructure in the east are advancing and a lot of work is being done to strengthen defence capabilities. At the same time, Rinkēvičs said “there is still a lot to do”.
It was also reported that the Lithuanian State Defence Council, which includes senior officials of the state and the army, decided on Friday that Lithuania’s defence funding for 2026 in 2030 will be 5-6% of GDP.
After the council’s meeting, Lithuanian President Gitanas Nauseda told journalists that the council “has agreed to divert 5-6% of GDP towards defence between 2026 and 2030”.
He explained that the agreement will allow maintaining defence funding at an average of 5.5% in this period of time.
Nauseda said Lithuania has until 2030, not some “far-away future”, to compose full divisions and raise capabilities of critical infrastructure.