Estonian prime minister backs spending 5% of GDP on defense

Prime Minister Kristen Michal (Reform) on Tuesday said Estonia should aim to allocate 5 percent of (GDP) to defense spending in the coming years. The money should come from investments, not tax rises, he added.
Michal expressed support for U.S. President Donald Trump's proposal that NATO member states increase defense spending to 5 percent of GDP.
"The new American president, Donald Trump, has made it quite clear that he expects NATO defense spending to rise to 5 percent. People ask what I think – I support a faster increase in defense capabilities. We know our adversary. Just as Poland, Latvia, and Lithuania must aim for 5 percent in defense spending, so must we," Michal told Vikerraadio's program "Stuudios on peaminister."
The prime minister said Estonia's defense spending will reach 3.7 percent of GDP in 2026.
Increasing the amount to 5 percent would require bringing forward several investments.
"I do not see raising taxes as a way to achieve this," Michal said. "This means it will have to be a diverse approach – central funding from the European Union, continued budget cuts within Estonia, and borrowing, in line with EU budget rules, as was done during the pandemic."
Writing on social media after the show, the prime minister said he was ready for discussions on the issue with EU colleagues and the next European Council meeting.
Our key security partner, under its new @POTUS, has sent a clear message: NATO defense spending must increase. We know our opponent, and I fully agree – our goal should be 5%. While our 2026 target is 3,7%, we must accelerate investments. No new taxes: funding must come from…
— Kristen Michal (@KristenMichalPM) January 21, 2025
Last year, it was reported that Trump expects NATO allies to raise defense spending to 5 percent of GDP.
Earlier this week, Lithuania's leaders said they support the goal, while Poland is expected to reach 4.7 percent of GDP this year.
All three Baltic states and Poland already spend more than 3 percent of their GDP on defense, far more than NATO's target of 2 percent.
The U.S. would also need to raise its spending to reach 5 percent.
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Editor: Valner Väino, Helen Wright
Source: Stuudios on peaminister