Lithuania on Friday formally asked Brussels for an exemption to the fiscal rules so that some of its military spending, up to 1.5 percent of GDP, would not be counted in the budget deficit, the Finance Ministry said.
“A formal request signed by the finance minister [Rimantas Šadžius] was sent to the European Commission and the Council on May 2,” the Finance Ministry told BNS on Friday.
Tadas Vinokuras, spokesman for Prime Minister Gintautas Paluckas, told BNS earlier on Friday that, on Wednesday, the government adopted a resolution authorising the Finance Ministry to request the activation of the budget exemption clause.
The EU Council announced on Wednesday that 16 member states – Belgium, Denmark, Estonia, Finland, Germany, Greece, Hungary, Latvia, Poland, Portugal, Slovakia and Slovenia – were seeking temporary exemptions from the bloc’s budget stability rules to boost their defence spending.
The EU’s executive body then said that 12 countries had already filed their formal requests, with Lithuania not among them. The remaining requests are expected to be submitted later.
After the prime minister announced plans to allocate 5.25 percent of Lithuania’s GDP to military spending next year, Finance Minister Rimantas Šadžius said that not all of it would necessarily appear in the 2026 state budget.
Šadžius then said that Lithuania would make use of the EU exemption clause, which would allow it to temporarily exceed the 3-percent deficit limit under the Maastricht treaty.
Lithuania’s State Defence Council decided last January to seek an additional 12–13 billion euros to be spent on defence between 2026–2030. This would bring military spending to 5–6 percent of GDP.
The plan is to finance this initially through borrowing and then to cover part of the costs by raising some taxes. Politicians also expect that economic growth will help bridge the gap.
Lithuania is increasing military spending to develop a national military division by 2030.
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