Reform, SDE ministers disagree over raising defense spending

HIMARS in Tapa on December 6, 2023.
HIMARS in Tapa on December 6, 2023. Source: Priit Mürk/ERR

While all of Estonia's political parties want to raise defending, agreeing on a specific figure is proving tricky and causing disagreements among politicians.

Last week, every big party told ERR that defense spending should rise to 3 percent of GDP in the future.

The Riigikogu agreed to allocate 2 percent of GDP to defense in 2001, a target that has been met and exceeded for several years. This year, the government will spend 2.85 percent of GDP on security.

The Government Office is now drawing up a new defense concept to set spending at 3 percent of GDP in the coming years.

On Monday, ERR found that coalition members have not yet agreed on how much spending should be raised by.

Minister of Defense Hanno Pevkur (Reform) wants to fix it at 3 percent, but Minister of Interior Lauri Läänemets believes an additional 0.5 percent should be allocated for civilian defense. Meanwhile, Minister of Finance Annely Akkermann (Reform) thinks including specifying percentages should be avoided.

Hanno Pevkur Source: Priit Mürk/ERR

Pevkur agrees with the proposal put forward last year by the Government Office to raise defense spending to 3 percent of GDP and meet additional costs related to Allies stationed in Estonia.

He said, once planned developments have been made, fixed defense costs will likely always come in above 2 percent of GDP in the future.

"We estimate that somewhere around 2.6 or 2.7 percent is the expected long-term cost. If we take [into account] the maintenance of medium [range] air defenses, the maintenance of cruise missile defenses and other major investments, then yes, it will be quite difficult for defense expenditure to fall below that [2 percent]," said Pevkur.

The minister does not agree with allocating a set amount for civil defense or in other areas.

"Giving accountants the opportunity to enter 100 percent of the national budget into an Excel spreadsheet makes it seem as if no political choices need to be made," Pevkur said.

Akkermann said the figure of 3 percent does not need to be written into law.

Annely Akkermann Source: Jürgen Randma/riigikantselei

"I worry about other issues. Also, for example, balancing the budget is a very important part of being able to run the country and keep it afloat and be creditworthy," said Akkermann.

She said fixing costs in the budget makes it harder to respond to new and unexpected crises.

"It's like if you tie your hands behind your back, then you can't maneuver anymore," the MP said.

However, the finance minister does agree with raising defense spending in general.

Läänemets wants 3 percent to be recorded as the base level of spending to enable longterm planning.

"We can't develop long-term capacity by having money one year and then no money the next," Läänemets said. 

Lauri Läänemets with standing next to Estonia's first warning siren. Source: Ken Mürk/ERR

The SDE chairman also wants half a percent of GDP allocated for civilian defense, but there is no agreement on this so far.

He said the area has been underdeveloped in recent years.

"But I believe that, here in the development of the defense policy concept, we could agree on this. Maybe even if it's not 0.5 percent right now, if it could be 0.3 percent, that's fine. If that kind of compromise needs to be made, fine, let's make it. The important thing is to decide on a principle," the minister said.

Läänemets did not agree with Pevkur and Akkermann's concerns and criticized the Reform Party.

"Unfortunately, for the Reform Party, money and budget issues are far more important than security issues. This is now an example of why budget issues should not be made the main pillar of a political party. In today's security situation, this could start to have a very negative impact," he said.


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Editor: Mirjam Mäekivi, Helen Wright

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