On Thursday, 21 April, Latvian Saeima passed amendments developed by the Ministry of Defence for the legislative draft Amendments to the Law on Financing of National Defence, which provide for gradually increasing the defence budget to 2.5% of the country’s GDP over the course of the next three years.
Latvia’s defence budget already reaches 2.2% of GDP. In 2023 it is expected to be at 2.25%, in 2024 – 2.4%, and in 2025 and the years that follow – no less than 2.5% of the country’s expected GDP. In accordance with NATO guidelines, Latvia has allocated no less than 2% of its GDP for the defence budget since 2018, as confirmed by the Ministry of Defence.
This means the provisional defence budget of 2023 may reach EUR 886 466 480, increasing by EUR 138 754 418. In 2024 it will reach EUR 1 002 485 480, increasing by EUR 231 284 506. In 2025 the budget is expected to reach EUR 1 103 916 480, increasing by EUR 332 715 506.
77% of the provisional budget increase is planned to be diverted towards investments, 12% – towards personnel, and 11% – towards equipment maintenance.
«We live in a time when a war rages in Europe. Tomorrow will mark the last couple of days of two months of this war. This war was started for no reason – Russia is justifying its imperialistic ambitions. This changes the entire security situation not only in Europe, but the world as well. Russia made is mistake with this invasion. They thought they could split the west and NATO, but they did the opposite. Russia also made a mistake in their calculation of the situation here, the Baltic Sea region. Soon Finland and Sweden will request NATO membership. This will change the situation in the Baltic Sea region, Latvia included, because it will open the path for cooperation and additional security for our country. Today our goals are dictated by the situation in Ukraine and the general attitude in Russia. It is a large aggressor country we have next to us. This means that we, by we I mean Latvia, Europe and NATO, must do all we can to make sure Ukraine wins. If we want to prevent future wars, Ukraine must win. This way we will preserve our security. We must invest in our security. Yes, we accomplished a lot in previous years, but we must continue doing even more. We too must be strong for Ukraine to win. We cannot afford to live in an illusion that everything is fine,» said Minister of Defence Artis Pabriks during the Saeima meeting.
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He also added that in the event of a crisis, there may be problems with supplies of defence resources in spite of the fact that Latvia is a NATO member state and can trust its allies. Increase of the defence budget is needed also because if Ukraine doesn’t win this war, the threat of aggression from Russia’s side will remain in any case.
«Our objective is to maintain Latvia’s security. We must be strong enough to not only drive the aggressor from our country, but also deter them from trying to enter our country’s territory. We have to protect Latvia’s skies to prevent enemy aircraft from ‘taking’ them. We need coastal guard to make sure Kurzeme feels safe. We need missile artillery to prevent land forces from coming near our borders. We also need to develop military industry, manufacture what we need locally, such as UAVs, munitions and missiles, so that we can supply ourselves. This will help create jobs and develop the country economically using the defence sector. We plan to found a commercial association with assistance from the state, which would coordinate and monitor military production. This way we will achieve the necessary effect to ensure Latvia and its borders avoid a war and so that Russia knows Latvia can defend itself. This decision on increasing the defence budget was also necessary to ensure our troops are safe and are prepared to defend our country. Our country’s security is our common goal. If there is no security, there will be no Latvia. Everything else – plans and investments – become dreams and illusions,» said Pabriks.
Until now the financing allocated for state defence was used based on priorities outlined in the National Armed Forces Development Plan 2020-2032. However, considering the growing geopolitical risks and Russia’s war in Ukraine, the current budget limits rapid and fast development of the country’s defensive capabilities.
The additional financing will help speed up implementation of critically important capabilities for the National Armed Forces five years quicker than planned. This includes speeding up development medium-range anti-air systems, long-range missile artillery systems, coastal guard systems, UAVs and controlled ordnance, logistics and supply chains, indirect fire support, infantry mechanization and national cyber security capabilities.
Additional financing will also ensure long-term maintenance of military equipment and promote National Armed Forces personnel recruitment goals, considering that human resources are vital for use of military equipment.
At the end of March the Cabinet of Ministers passed the proposal from the Ministry of Defence to increase defence expenditures to 2.5% of GDP.
Amendments to the law will come to force the day after promulgation, BNN was informed by the Saeima’s press-service.