MP: Positive signals from European Commission behind defense spending hike idea

Riigikogu National Defense Committee member Kristo Enn Vaga (Reform) stated that Prime Minister Kristen Michal's (Reform) proposal to raise defense spending to 5 percent was motivated by positive signals from the European Commission regarding a defense bond program and the possibility of Friedrich Merz becoming Germany's next chancellor.
"This is a very necessary initiative in every sense. We've long discussed with European Union member states the need to increase defense spending. The new U.S. president has both officially and unofficially indicated that Europe should allocate more money to defense. At this year's summit in The Hague, we will certainly see new decisions that will significantly exceed the current 2 percent target. There has been talk that it could be 5 percent," Vaga told ERR, commenting on Michal's call.
"This is precisely the moment where, together with our regional partners — Latvia, Lithuania and Poland — we've set the goal to reach 5 percent in the coming years. At the first level, this means we need agreements within the EU on two key issues. First, the long-discussed defense bond plan must be realized, allowing EU member states to jointly borrow funds for defense purposes. Second, we need to start a debate on whether defense spending could be excluded from Maastricht rules or at least those defense expenditures exceeding 2 percent of GDP," Vaga added.
A few hours before Michal's proposal to raise defense spending to 5 percent, Vaga had criticized and mocked a suggestion by Urmas Reinsalu, leader of Isamaa, to expedite ammunition procurement and take on loans to fund it.
"During the presentation of this draft, we once again witnessed Reinsalu's characteristic windmill style: spinning, twirling, filling the room with air while attempting to solve a problem that largely no longer exists. An additional €1.6 billion has already been allocated for national defense. And here he is saying, 'Let's just buy whatever, as long as we buy it quickly, no matter where the money comes from — let's take a loan, it's a one-time cost.' It doesn't matter if we have to pay it back or not. This enjoyable style of his certainly earns him applause from his faction," Vaga said during a Riigikogu session on Tuesday.
ERR asked Vaga if he had made a 180-degree turn in his stance.
"If you listen to my speech in the Riigikogu yesterday, I was mocking Reinsalu's earlier claim that we don't need to worry, because any borrowing is just a one-time expense. We all know that's not true. Even Mr. Reinsalu later admitted that borrowing entails interest payments over the years. I ridiculed his notion that a loan is something you don't have to repay and that it's a one-time thing. That's certainly not the case," Vaga commented.
"If we can do this in cooperation with EU member states — meaning joint defense bonds — it supports multiple goals. One is that we ourselves invest more domestically in defense. But as a small member state, it's essential for the entire region to contribute more. If we could indeed reach an agreement where 27 member states increase their contributions and take out a joint loan with the singular purpose of enhancing EU defense capabilities, we've always been in favor of that. However, it has previously seemed nearly impossible to reach such an agreement within the EU," Vaga explained.
According to Vaga, new winds are blowing in the EU, with encouraging signals coming from member states and European Commission officials. For example, he sees hope in Friedrich Merz potentially becoming Germany's next chancellor, noting that Merz has taken a more resolute stance on European defense matters than the current chancellor, Olaf Scholz.
"The likely new chancellor, Mr. Merz, could be the person to support this [defense bond] program from Germany and we very much hope for that. Together with our regional partners, we will push for a joint effort to enhance defense capabilities," Vaga said.
"A major guiding factor is also the new commissioners. In the security field, we are eagerly awaiting Defense Commissioner Andrius Kubilius' so-called European defense white paper. Our expectation is that it will include a proposal from the European Commission for joint defense bonds," Vaga added.
On Tuesday, Prime Minister Kristen Michal stated that the country should set a defense spending target of 5 percent of GDP. According to the prime minister, the costs should be covered through central EU funding, continued budget cuts and loans.
Speaking on Vikerraadio's "Stuudios on peaminister" program, Michal expressed support for former U.S. President Donald Trump's proposal that NATO member states should increase defense spending to 5 percent of GDP.
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Editor: Aleksander Krjukov, Marcus Turovski