Lithuania’s Prime Minister Inga Ruginienė announced that next year’s state budget will allocate 5.38% of the country’s gross domestic product (GDP) for defence spending. However, she emphasised that the funds will also be directed toward infrastructure development and strengthening other law enforcement institutions, not solely the armed forces. Defence hawks have attacked the plans, calling it creative accounting.
“We should not understand defence only through the acquisition of weapons,” Ruginienė said. “There are many other components that come into play during wartime – such as the State Border Guard Service, police, and others. Everyone, including civilians, must be prepared for the day X. We have been working too little with civilians.”
The decision confirms recent reports suggesting that the defence budget will cover a broad range of national security institutions, including law enforcement agencies typically financed through the Ministry of the Interior. The government also plans to fund road improvements, which normally fall under the Ministry of Transport.
Military leadership critical of allocation
Lithuanian Armed Forces Commander Gen. Raimundas Vaikšnoras, currently visiting the United States, criticised the decision to distribute defence funds across multiple ministries.
“If we scatter the money among other ministries, I must ask – what will that look like in reality?” Vaikšnoras said. “I’ve heard about plans to invest in paving stones or roadworks in municipalities. But we won’t fight a war with paving stones.”
Although the overall defence allocation appears to meet the 5–6% GDP range approved earlier this year by the State Defence Council, military officials argue the actual share for the armed forces will be lower.
According to the Ministry of Defence, the armed forces and the ministry itself had sought a €4.9 billion budget for next year to cover weapons procurement, air defence, division expansion, and the arrival of a German brigade. Finance Minister Kristupas Vaitiekūnas said the current draft budget totals €4.79 billion – roughly €110 million less than what the defence system alone asks for.
“National defence is not limited to one institution,” Vaitiekūnas said. “The government will distribute funds in a way that best meets the country’s defence needs. At this stage, no additional borrowing is planned.”
Defence minister: budget still meets key needs
Defence Minister Dovilė Šakalienė said Lithuania will continue with its planned military projects, including purchasing new weapons systems, enhancing air defence, preparing to host the German brigade, and expanding the division.
“The discussion is not about the 5% itself, but whether our essential needs will be met,” Šakalienė said earlier. “They exceed 5%. For Lithuania, 5% is not enough.”
Later in the day, Šakalienė said the budget “essentially allows us to meet those needs without significantly harming ongoing projects”.
Business rep sees creative accounting
Lithuanian Business Confederation President Andrius Romanovskis estimated that the actual defence system funding – excluding other ministries – will be closer to 4.8% of GDP.
“Bureaucrats often cleverly include unrelated areas under the label of defence,” Romanovskis said. “We say simply: the armed forces and defence system should receive at least 5% of GDP. Other areas are important, but we’re talking about the army, weapons acquisition, division development, and hosting the German brigade.”
President Gitanas Nausėda said that Lithuania must adhere to NATO’s accounting standards when reporting defence spending.
“I clearly remember the NATO summit in The Hague,” Nausėda said. “There was much discussion about methodologies, what should or should not count as defence spending. But NATO’s principles are clear. We have made commitments.”
According to NATO rules, civil protection, internal security, and border guard expenditures are not considered direct defence spending.
During the summit at The Hague in August, NATO leaders agreed to a 5% “defence investment” target. It consists of 3.5% of GDP spending on “core defence requirements” and 1.5% on defence-related needs, such as infrastructure, civil resilience, and boosting military industry.
Lithuania’s Finance Ministry’s data show that although the Ministry of Defence planned to spend nearly €2.9 billion this year, it has so far used only about €1 billion.
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