Lithuania and Estonia to increase defence spending

Lithuania and Estonia have become the first NATO countries to announce their intention to raise defence spending to 5% of GDP in response to corresponding US demands, according to the Financial Times.

Lithuanian Foreign Minister Kęstutis Budrys noted that from 2026 and at least until the end of the next decade, Vilnius plans to allocate between 5% and 6% of GDP to defence needs, compared to the current 2.9%. Funding for such costs is expected to come from government borrowing and the optimisation of spending in the public sector.

The Prime Minister of Estonia, for his part, confirmed that Tallinn intends to increase its defence budget from the current 3.7% to 5% of GDP.