Estonia to pay additional €200,000 into NATO budget

NATO, Estonia and USA flags.
NATO, Estonia and USA flags. Source: (Siim Lõvi /ERR)

Estonia will pay €200,000 more annually into NATO's joint budget after reforms which will see the USA decrease its contributions.

Head of the Defense Planning Department of the Ministry of Defense Tiina Uudeberg told ERR Estonia's contribution to the co-financed budget will increase from 0.116 percent to 0.125 percent, which is an annual increase of €200,000. She said in 2019 Estonia paid €2.5 million in total into the budget.

NATO's co-financed budgets include the Civil Budget, the Military Budget and the NATO Security Investment Program (NSIP).

Uudeberg said allies regularly review the cost sharing of NATO's co-financed budgets and a new cost sharing formula has been agreed to take effect from 2021. 

Under the new formula, the contributions of most European allies and Canada will increase, while the US decreases its share. The US share will be reduced from approximately 22 percent to 16 percent. "The change demonstrates above all the allies' commitment to the alliance and the emphasis on fairer burden-sharing," Uudeberg stressed.

Co-financing budgets fund the activities of NATO HQs and military headquarters. They also cover the costs of certain NATO operations and missions and the military capabilities of NATO as an organization.

The NSIP is used for infrastructure investment and has previously been used to fund projects in Estonia, such as Ämari Air Base, the NATO Force Integration Unit in Tallinn, the NATO Cyber ​​Training Field, and the base in Tapa. "The funds Estonia has received for infrastructure investments under this program are many times higher than Estonia's contributions to NATO-funded budgets," Uudeberg said.

Since 2016, Estonia has received approximately €63 million from NATO's NSIP budget. This year, that amount is just over €19 million.

"Overall, however, NATO-funded budgets make up a very small part of allied defense spending," Uudeberg said. Estonia's annual defense budget is approximately €600 million.

International media announced last week that NATO's joint budget reform is largely a symbolic step. The US is pushing allies to spend at least 2 percent of their domestic GDP on defense spending, which many countries do not do.


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Editor: Helen Wright

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