Estonian stance at NATO talks calls for defense spending hike next year

If the capability targets set for Estonia align with those the country has proposed to NATO's Supreme Allied Commander Europe (SACEUR), defense spending will need to rise to between 4 and 4.5 percent GDP by 2026 already, Minister of Defense Hanno Pevkur (Reform) said Wednesday.
Last summer, a year after NATO leaders approved its new defense plans, the alliance's new capability targets were put to paper — a 20-year plan detailing how to actually meet these defense plans with capabilities.
The SACEUR also issued each country their own respective capability packages. Some larger countries have to buy submarines, some must establish several new tank brigades, while others must acquire fighter jets or air defense systems. And by November at the latest, countries were required to submit feedback on their capability packages.
Thus, Estonia proposed that much of what these new defense plans require of the country could be done more cheaply. For example, perhaps drones would suffice in lieu of helicopters, and perhaps certain effects on the battlefield could be achieved using entirely different means.
Many countries also sought to reschedule their timelines. Although NATO SACEUR Gen. Christopher G. Cavoli stressed that filling the most critical capability gaps should not be delayed, other voices suggested that some capabilities might be developed not over seven years, but rather, for example, over 20.
Following feedback from member states, negotiations began. It was against this backdrop that Prime Minister Kristen Michal (Reform) stated in January that Estonia should set a defense spending target of 5 percent GDP.
According to the defense minister, negotiations on capability targets are in their final stretch, and the targets set for Estonia are likewise spread out over a 20-year period.
"Within these 20 years, there are certain peaks," Pevkur noted.
"At some point you have to make a bigger investment, and at another, costs are more stable," he explained. "But if we look at it on average, then from a funding perspective, of course it's better if it's a stable average, not [a situation where] one year you have to raise defense spending to, say, 6 percent, and another year you're at 3 percent. Looking purely at needs, defense spending should actually increase next year already."
The minister reiterated that how rapid a hike in defense spending will be needed by 2026 depends on the agreement reached at the NATO summit in the Hague this summer.
Broadly speaking, however, the framework for the task ahead of Estonia is already quite clear. It is unlikely that the Hague summit will set a lower target for Estonia than the country itself proposed last fall.
'We may have to consider borrowing'
ERR asked Pevkur how high Estonia's defense spending should rise next year, if the country's negotiating position were to be converted into euros.
"In my current estimation, it's definitely over 4 percent," he replied. "It's more likely around four and a half. But I'm waiting for the final agreements and calculations, and then I can give you an exact figure."
In the state budget strategy agreed on last fall, the government proposed that Estonia's defense spending should reach 3.68 percent GDP in 2026, or €1.63 billion. Reaching 4 percent would require an additional €140 million, while reaching 4.5 percent would require €363 million more.
Pevkur cited the prime minister, who has noted that Estonia would prefer for additional funds to come from the EU's joint budget.
"But if there's no other option, then we also have to consider borrowing," the defense minister acknowledged. "But the fact is that we must invest more in national defense."
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Editor: Aleksander Krjukov, Aili Vahtla