Lithuania’s 2025 draft state budget will be revised to increase defence spending to 3.5 percent of GDP, Gintautas Paluckas, the Social Democratic candidate for prime minister, said on Monday.
He noted that the country would need to borrow additional funds to meet its defence commitments.
“The current draft budget for next year will be revised, aiming to increase the defence allocation to 3.5 percent of GDP,” Paluckas said during a discussion on TV3.
“In the short term, the need for defence funding will have to be met by increasing public debt. Tax changes will have an effect; they will gradually fill up the defence fund, year by year. However, the need [for national defence] is obviously greater as the timeframe shortens,” he said.
Currently, Lithuania allocates around 2.5 billion euros, or about 3.2 percent of GDP, to defence.
Next year’s draft budget earmarks a similar amount for national defence, but with projected economic growth, this will represent just over 3 percent of GDP.
Public debt is projected at 43.2 percent of GDP.
Paluckas also emphasised the need for a detailed defence financing plan, particularly to accelerate the establishment of the planned military division.
“Taking defence seriously, we’ll have to draw up a full financing plan to see in which year the funds are needed,” he said.
President Gitanas Nausėda said last week that Lithuania could consider sidestepping European fiscal rules to develop a full military division by 2030.
Defence officials said after a meeting of the president-chaired State Defence Council a few weeks ago that, with the current defence funding, Lithuania’s military division could achieve full operational capability in 2036–2040, instead of 2030 as previously planned.
Nausėda also said that advancing the division’s establishment to 2030 would require an additional 10 billion to 14 billion euros in defence funding over this period.
He said that spreading this financial requirement over six years would mean allocating 5 to 5.5 percent of GDP to defence.
The so-called EU Maastricht criteria require that the public finance deficit should not exceed 3 percent of GDP in a given year and that public debt remains below 60 percent of GDP.
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