Estonia is set to slash planned defense spending by more than €100 million compared to the current Defense Forces development plan and the previous state budget strategy (RES). Total defense spending will remain above 2 percent of GDP.
Defense spending will be reduced by €114 million compared to the current Defense Forces development plan and defense investments program (KIP), Minister of Defense Kalle Laanet (Reform) said at a press conference on Tuesday. While the 2022 defense budget is bigger by €59.4 million compared to this year's, it falls €16.6 million short of what was prescribed in the previous government's fiscal strategy. The gap between recent plans and the new RES will grow in future years.
Approved cuts will amount to €71 million in 2022-2025, but because the government has not yet approved funding for the 2025 defense investments program and additional applications have been rejected, the estimated cut totals €114 million over four years.
Laanet emphasized that the government is looking at the ten-year defense development plan and wants to hit all targets by 2031. "Intermediary steps may be slower, while I hope we can return to speed at one point," the minister said. He added that decisions concerning the development plan have been postponed until fall, which is when new information should make it easier to decide which things to take forward and how soon.
Staff and support services cuts
Saving will be achieved through slower than planned development of capacity, staff and administrative expenses, while the EDF promises to maintain above national average salaries.
Efforts to hit targets in the current ten-year development plan, including development of both infantry brigades, naval defense and territorial defense based on the Defense League will move forward more slowly.
Some 270 people will be laid off in the administrative area of the Ministry of Defense of whom around 200 from the Defense Forces, 40 from the Defense League and the rest from the Defense Resources Board and other bodies.
At the same time, Commander of the Defense Forces Lt. Gen. Martin Herem said at the press conference that the EDF will try to maintain the average salary of active servicemen at 30 percent above the national average.
Administrative and operating costs will be saved by reducing the budgets of several activities not directly tied to military national defense. Defense attaches in Warsaw and Tbilisi will be recalled.
"The annual staff budget of the EDF is €110 million. The total budget of the Ministry of Defense is €650-700 million. It is impossible to cut costs without it affecting staff. We cannot give up on heating buildings or using and maintaining vehicles," Herem told ERR.
"We will maintain the recent number of training exercises, even though they might have fewer participants moving forward," he said.
Exercises will also be given a broader regional dimension as more will be held cross-border. The Defense Forces major training exercise Siil (Hedgehog) will for the first time be conducted in Estonia and Latvia in 2022.
Weapons procurement to continue
At the same time, several weapons procurement programs will continue – a total of €382 million will be invested in armament developments and munitions stores in 2021-2025. The Defense League is set to grow from 6,500 fighters to 9,000, while there are plans to boost the number of new conscripts from 3,500 to 4,000 a year by 2025.
Investments will see the EDF equipped with 120 mm mortars, new modular bulletproof and flak jackets, with the transition to new assault rifles and the K9 Thunder mobile artillery procurement to continue – both brigades will get 12 artillery pieces. The EDF will also outfit CV90 IFV support armored vehicles and construct armored shooting ranges at its central polygon to improve the training conditions of armored units.
Development of naval defense will continue with the creation of anti-ship missile capacity and procurement of naval mines for which €56 million has been earmarked. Estonia will also move forward with its anti-ship missiles tender despite Latvia dropping out of what was initially a joint project.
"A joint anti-ship missiles procurement with Latvia would have been a politically and economically sound decision. It is unfortunate that the Latvians cannot do it right now, while it remains vital for the Baltic countries to develop this capacity, even if it happens a few years later," Herem said. Secretary General of the Ministry of Defense Kusti Salm said that Latvia dropping out could mean the process becoming more expensive for Estonia in the future.
Laanet promised that the government will return to the topic of the navy moving from its current location during fall national defense development plan deliberations. One important aspect is what will be decided in terms of merging the navy and marines. Because the Mine Harbor will not be sold, resources will need to be find to facilitate the 2025 defense investments program.
Intelligence cuts more modest
Laanet said that cuts will be more modest in intelligence and early warning as these are clearly priority fields in the current security situation.
Lt. Gen. Herem told ERR that the Defense Forces has not abandoned plans to use more space technology in defense development. "Satellite images are already used in early warning systems and intelligence, both as part of international cooperation and domestically," the EDF commander said. "The question is how quickly we can do that," he added.
Air defense could move to the capital
The defense investments plan includes renovating the Ämari airstrip to make sure allied aircraft could land and conduct air policing in Estonia in the future.
The renovation means that the NATO air policing mission will have to move to Tallinn Airport that will also require certain investments in its infrastructure.
Band to generate own revenue
Talking about the decision to move the Band of the Defense Forces under the Estonian War Museum, Herem said that the band is still expected to play important Defense Forces events and that the ministry will ensure fixed funding for celebration of certain events. The ministry will also pay for the band's instruments and rehearsals. The musicians are free to earn additional revenue in their free time but cannot wear EDF uniforms while doing so.
Isamaa managing committee: no-confidence vote against the defense minister in order
The managing committee of the opposition Isamaa party that convened on Tuesday evening found that the defense domain cutting 270 jobs is clear grounds for a no-confidence motion against Laanet.
Isamaa chairman Helir-Valdor Seeder recalled that Laanet's recent claims have turned out to be false.
"Before the fiscal strategy was unveiled, the defense minister said that defense spending will not be cut. We know by today that security spending will be reduced by tens of millions of euros compared to the previous RES. Next, the minister claimed cuts would not be made at the expense of defensive capacity. Now, Lt. Gen. Herem has said that layoffs also concern active servicemen and the Defense League," Seeder said.
The committee found that Minister of Defense Kalle Laanet has lied to the public and that the planned cuts will be made at the expense of national security and defensive capacity, which is why it will propose expressing loss of confidence in Laanet.
"National defense and people's defensive will are based on several pillars. These are specific investments, Defense Forces staff, the Defense League, diplomatic and foreign representations and important national symbols. A defense minister who cannot defend his field and weakens national security through his decisions cannot stay in his post. Layoffs in the Defense Forces and Defense League are unacceptable. These cuts come at the expense of defensive capacity in Estonia. The government should not go after national defense in what is a complicated security situation," the Isamaa managing committee said in its press release.
Editor: Marcus Turovski