EU budget rules could still cast shadow over Estonia's raised defense spending

Estonia hiking its defense spending to over 5 percent of GDP per year in the coming years still runs the risk of violating European Union budget rules as things stand, "Aktuaalne Kaamera" reported.
Estonia's defense spending for 2024 is already estimated at 3.43 percent of GDP, well above the 2 percent NATO-recommended level, and second highest in the EU.
The current goal is to boost this further still, to 5 percent.
The government mainly seeks to secure additional funds via loans and following the latest military recommendations from the commander of the Estonian Defense Forces, and also NATO capability goals.
The situation has been somewhat alleviated by the relaxation of EU budget rules, which allow for 1.5 percent of defense spending to be excluded from budget balance calculations.
The loan conditions for the European Commission's approximately €150-billion defense loan fund will also be revealed on Wednesday.
Despite all this, it is likely that Estonia will violate budget rules at some point.
Prime Minister Kristen Michal (Reform) said: "If I have a choice and if the Estonian people have a choice, then it is better to explain the violation of budget rules and exceeding the balance as an independent nation in Brussels, than to face the very different situation in which war is taking place on Estonian soil. That is our guiding principle — we do what needs to be done."
When asked why the government had not made a similar decision earlier, he added: "All loans taken and all money spent must be covered one way or another."

The 5 percent goal may even be exceeded in the coming years.
Defense Minister Hanno Pevkur (Reform) told "Aktuaalne Kaamera" all the required capabilities will be developed.
These capability developments are intended to go ahead as quickly as possible, he said, meaning discussions on the defense spending component of the state budget strategy will not wait until their usual time of August but will instead be concluded next month.
A detailed financing plan is also to be completed in cooperation between the defense ministry and finance ministry in the coming weeks.
Foreign Minister Margus Tsahkna (Eesti 200) said that the government must ensure funding to create the necessary capabilities.
"Our task as a government is to ensure funding to create these real capabilities. These capabilities are not just bombs, ammunition, and some machines — they also include people," he stated.
The Ministry of Defense is to immediately begin preparing additional procurements for the next three years.
Not only is it capability developments that lie ahead, Pevkur said, but also the modernization of conscription and personnel changes.
"We all understand that when acquiring new military capabilities, personnel are also needed; forces are required. As a general overview, I would say that we must also get accustomed to the idea that we will need to use reservists increasingly in our defense model, which means they will likely have to participate in training exercises more often," he said.

The minister in recent days has been facing criticism over the pace of the procurement of ammunition.
Pevkur reiterated that the entire €1.6 billion procurement is in progress.
Meanwhile, the prime minister urged the opposition not to drag defense issues into the domestic arena, though he did not clearly state whether the defense minister's job was secure.
Not only has Pevkur been facing criticism, but also four ministerial posts have become vacant anyway, with the exit from office of the Social Democrats last week.
"To keep things spicy, ministerial job offers will arrive at the end of the week, when the board meetings take place. So first of all, we will discuss content, and then jobs. Right now, we are not making job any offers," the prime minister said.
The merging together of ministerial functions has not been completely ruled out either.
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Editor: Andrew Whyte, Merili Nael
Source: "Aktuaalne kaamera"