Lithuanian government proposes to up defense spending to 2.5 pct GDP

The Lithuanian government on Wednesday agreed to increase the country's defense spending by almost 300 million euros and proposes to the country's parliament to make the necessary adjustments to the 2022 state budget.

The change would allow increasing defense spending to 2.52 percent GDP.

"(This issue - BNS) should be discussed as a matter of urgency," Finance Minister Gintare Skaiste told the Cabinet meeting on Wednesday.

There's a proposal in the 2022 budget to give the Finance Ministry the right to borrow on behalf of the state to meet Lithuania's obligations related to NATO membership. The ministry would borrow based on the factual needs indicated by the Ministry of National Defense. The latter plans to use the extra funds to buy additional weaponry, military equipment, ammunition as well as equipment to bolster cyber security.

Currently, the law provides for funding for the Ministry of National Defense to stand at 2.05 percent GDP for 2022, based on the OECD's December, 2021 GDP forecast for Lithuania, which amounts to slightly over 1.2 billion euros.

Last Friday, the government decided to allocate 40.43 million euros in additional funding from borrowed funds to the Ministry of National Defense for host nation support to cover the costs needed to host NATO partner forces.

According to the Finance Ministry, the Seimas' approved adjustments to this year's budget law will allow for the immediate allocation of up to 257.6 million euros in additional funding for national defense.