It is planned to increase the budget of the Latvian defence sector to 4% of gross domestic product (GDP) next year and then move towards 5% of GDP in the coming years, as journalists were told by Prime Minister Evika Siliņa and Minister of Defence Andris Sprūds after a meeting of the Latvian government held on the 18th of February.
Money will have to be sought to increase funding, including by reviewing the internal resources of ministries, politicians said. The PM said the Ministry of Defence itself should also review its own sector and how funds are spent, so that it is possible to minimise spending “where there is overlap”.
The PM sees an opportunity to “go hand in hand” with the interior affairs sector, as there are many functions that overlap between the two sectors. It is necessary to effectively save money at the expense of reducing administrative and other functions, the politician argued.
Siliņa argued that there is a growing need for the development of the national military industry in Latvia, because not everything that is necessary for national defence can be purchased abroad. She noted that this is being discussed in different formats at the NATO, European Union and national levels.
The government has assessed how to shorten delivery times for goods needed for national security needs, and has also agreed that the further development of the national defence corporation will be strengthened.
Defence Minister Andris Sprūds told journalists that the agreement reached on defence spending in the amount of 4% of GDP is necessary to strengthen the 26 defence priorities provided for in the National Armed Forces Development Plan.
These priorities include, for example, investment in air defence, shore defence, artillery systems, infantry fighting machines, ammunition and unmanned devices. These priorities include, for example, investment in air defence, coastal defence, artillery systems, infantry fighting machines, ammunition and unmanned devices.
“All this requires resources. This is why there is this decision – to allocate at least 4% of GDP next year and move towards 5% later on. This coincides with NATO’s goals and plans,” stressed the minister.
Sprūds reminds that there are contracts already signed in regards to supply of arms, and deliveries are expected. Nevertheless, it is important to keep in mind that Latvia lives in a period of risks, and the best deterrence is a capable defence.
“One is defence homework on a national level. We are also closely engaged in tasks together with allies, including NATO allies in Europe,” adds the minister.
As previously reported, the defence budget for 2025 is planned at 3.45% of Latvia’s GDP or EUR 1.56 billion. Based on these figures, for the defence budget to have reached 4% this year, it would have had to be around EUR 240 million higher, while reaching 5% would have required a defence budget of around EUR 690 million.