The Lithuanian government on Wednesday approved a proposal to allocate an additional 461 million euros from borrowed funds for an advance payment for German Leopard tanks being purchased by Lithuania.
The proposal made by the Finance Ministry followed a letter from the Defence Ministry in July, stating that the ministry is due to make an advance payment of 461 million euros for tanks in the third quarter of this year.
The Defence Ministry explained that it currently had no possibility to reallocate its funds to make the payment, while delays in fulfilling obligations “may prolong the delivery of weapons and military equipment of particular importance for national defence”.
According to the Finance Ministry, the borrowing limit increased by 800 million euros last year allows for the allocation of additional funds for this advance payment.
“We are talking about the use of government reserves for specific purposes and funds borrowed on behalf of the state, including 461 million euros to the Defence Ministry for advance payments for the purchase of tanks. This is a serious decision,” acting Finance Minister Rimantas Šadžius told the government meeting he chaired.
The cabinet approved the decision unanimously.
The law approving the 2025–2027 budget gives the Finance Ministry the right to borrow for military needs, including for military mobility and dual-purpose transport infrastructure, as well as for military infrastructure needed to provide host nation support and to finance capital investments in the defence industry being developed in Lithuania.
Lithuania intends to acquire a total of 44 Leopard tanks by 2034, some of which should be delivered in 2029.
In April, the cabinet already allocated almost 190 million euros for advance payments for additional infantry fighting vehicles Vilkas and the NASAMS medium-range air defence systems.
Lithuania plans to spend just over 4 percent of GDP on defence this year, before increasing defence spending to 5.25 percent next year.
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