Estonia may need supplementary budget for increased defense spending this year

As the 2025 state budget does not account for a significantly larger increase in defense spending already planned, a supplementary budget may need to be drafted, Prime Minister Kristen Michal (Reform) said.
Michal said that if only a small amount of additional defense spending is needed, it could be covered from reserves. But larger investments would require a supplementary budget.
He said: "If this requires a supplementary budget, then I agree that the government will draw one up. There is always urgency when it comes to defense spending. This Thursday, the defense minister is to present to the government a vision, based on NATO defense plans and the recommendations of the commander of the defense forces, on what is needed in the coming years. However, considering budgetary possibilities and European rules, this brings direction and the chance to make larger defense expenditures already this year. But much depends on what we can procure this year, because the pace is extremely fast and the market is quite hot."
Whether a supplementary budget is needed should be clear within a month, the head of government added. How quickly it is drawn up will determine if the Riigikogu can process it before or after the summer break.
Raoul Lättemäe, head of department at the Ministry of Finance, told "Aktuaalne kaamera" that neither this year's budget nor the recent economic forecast accounted for the state budget deficit potentially reaching 4.5 percent this year, instead of the 3 percent permitted under EU rules.
Lättemäe said: "Our forecast reflects what has already been decided on in the state budget. And in order for expenditures to be made, the Riigikogu gives a mandate. If the goal now is to boost defense spending this year already, that definitely cannot be done without a supplementary budget."
Minister of the Interior Igor Taro (Eesti 200) said all options to strengthen defense should be utilized. If that requires a supplementary budget, it should be carried out. Broad-based security also involves the Ministry of the Interior.
"This involves building up additional capabilities, everything concerning the border," Taro said, calling the national border a "high priority" and also drone defense not only meaning a border drone wall, but coverage of the whole country.
"We are also, to some extent, addressing helicopter capability," Taro added.
The Ministry of Defense responded to "Aktuaalne kaamera" in writing, stating that a hike in defense spending to 5 percent is the baseline minimum for the coming years, and will likely remain the case until at least 2030.
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Editor: Marko Tooming, Andrew Whyte
Source: 'Aktuaalne kaamera'