Minister calls for defense spending to reach 3 percent of GDP

Hanno Pevkur (Reform)
Hanno Pevkur (Reform) Source: ERR

Defense spending in Estonia must reach 3 percent of Gross Domestic Product (GDP) per year in the current, changed security situation, Minister of Defense Hanno Pevkur (Reform) says, adding this should be achieved for the first time in 2024.

Pevkur made his remarks in the context of a discussion at the Riigikogu, adding that cross-party agreement would be needed ahead of boosting defense spending to 3 percent of GDP.

He said: "We must continue to contribute to our defense capabilities over the longer term at least at the same level as next year and the year after."

"I would venture to state here, today, the ambition that long-term defense spending must be fixed at 3 percent of GDP to strengthen and maintain our defense capabilities," he continued.

Pevkur added that defense expenditures are increasing across NATO as a whole, and especially in Estonia's region.

"On NATO's eastern flank, defense spending is increasing both as a percentage and in absolute terms. Increasingly, the target for defense spending is becoming 3 percent of GDP. Estonia must also become a permanent member of this 'dignified' 3 percent club," Pevkur added.

The requirement for NATO membership is 2 percent of GDP per annum, which Estonia has long met and exceeded.

The stakes which the Ukraine war have raised make the issue one of national survival, he noted, while spending should also be smarter, for instance in thinking through what types of weapons systems should be procured.

"It is not responsible or sustainable to acquire weapons systems that we cannot provide enough ammunition for later on. Different systems need maintenance to be useful in the event of a crisis, unit training cannot be carried out simply by reading military science textbooks. Military defense must be a well-thought-out whole," he added.

The equipment, storage, ammunition depots and other one-off costs for a single mechanised infantry brigade in reserve is approximately €1.3 billion, Pevkur added.

The annual cost of maintaining such a brigade is around €130 million at today's prices.

Two battalions of self-propelled artillery with a total of 36 systems requires an investment of around €235 million, while an average of €20 million per year is needed for maintenance.

The need for ammunition on the battlefield for Estonia's current weapons systems is in the order of €100 million per day.

Estonia is facing important investments in increasing its territorial defense to 20,000 troops, as well as hosting additional allied units, the defense ministry says, while a significant share of investments remains in the Estonian economy.

For example, in the last three years, national defense equipment procurements, investments and economic expenses have totaled just over €1 billion, of which €562.5 million, or more than half, has gone to Estonian suppliers.

"We are constantly looking for and finding savings so that we can direct the maximum amount of resources into force generation, so that the creation and equipping of units and the adoption of new systems takes place very quickly," the minister added.

Next year's defense expenditure is set to be 2.85 percent of GDP in Estonia, while it will exceed the 3-percent mark for the first time ever in 2024.


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Editor: Andrew Whyte

Source: Ministry of Defense

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