The State Defence Council (VGT), which includes Lithuania’s top political and military leaders, has agreed to dedicate 5.5 percent of GDP to military spending over the coming five years.
“We have agreed that in the period 2026–2030 we will allocate between 5 and 6 percent of gross domestic product to defence annually,” President Gitanas Nausėda told reporters after the VGT meeting on Friday.
The additional spending is needed to build up a military divisions within the Lithuanian armed forces faster.
Next year’s state budget initially allocated about 2.5 billion euros for defence, or just over 3 percent of GDP. However, the new government increased the 2025 borrowing limit by roughly 800 million euros, and borrowing this full amount could raise defence spending to 4 percent of GDP.
According to the president, there are no plans to raise taxes in order to meet the military spending targets. Instead, Nausėda said, the increase will be covered by borrowing and cutting public spending elsewhere.
“I would very much prefer not [to raise taxes], and I think we will certainly not go down this road where more funding for national defence is linked to a higher tax burden on the population. We must avoid this,” Nausėda argued.
Defence officials estimate that at current funding levels, Lithuania’s military division would only achieve full operational capability by 2036–2040, rather than 2030 as originally planned.
Nausėda had previously said that bringing the timeline forward to 2030 would require 10 billion to 14 billion euros in defence funding over this period, in addition to what is currently projected.
Lithuania commits to allocating between 5% and 6% of its GDP to defense from 2026 to 2030. The decision was made today at the State Defense Council. Difficult times require bold decisions& leadership. We call on our allies to follow this lead. The era of passive “sit-and-wait”…
— Kęstutis Budrys (@BudrysKestutis) January 17, 2025
Foreign Minister Kęstutis Budrys has urged other NATO members to raise military spending too.
“Difficult times require bold decisions and leadership. We call on our allies to follow this lead. The era of passive sit-and-wait strategies is over,” he posted on X on Friday.
Division by 2030
According to the president, Lithuania must reach full division-related and other critical infrastructure capabilities by 2030, not “sometime in the distant future”.
The president expects “maximum involvement from institutions”.
“The likelihood of Russian military aggression is still real, but it is not imminent. We must significantly step up our efforts to strengthen defence and deterrence and devote more resources to this end,” the president said.
“Our security is also ensured by our NATO membership, but it will only be effective if we are prepared to defend ourselves,” he added.
Defence Minister Dovilė Šakalienė says Lithuania seeks to have effective armed forces.
Last year, the VGT said that Lithuania’s military spending, which has so far stood at around 3 percent of GDP, would not be sufficient to set up a division by 2030. Additional funding is needed to purchase expensive tanks and tracked infantry fighting vehicles and build adequate infrastructure for supporting the military division.
Faster weaponry deliveries
According to defence officials, a bigger military budget will allow for faster advance payments for various weapons being acquired by Lithuania.
It was previously reported that German tanks, which are key for the establishment of the division, would arrive in Lithuania in stages between 2029 and 2034.
However, the defence minister has already announced that Lithuania will make an advance payment later this year in order to receive the Leopard tanks by 2030.
“The existing funding plan is not based on percentages, but on very detailed calculations and recalculations of what we absolutely need to have and what we can realistically acquire within a certain timeframe,” Defence Minister Šakalienė said on Friday, adding that additional funding will allow making advanced payments for other weapons and equipment.
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