Lithuania, Estonia commit to historic 5% defense spending target
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Lithuania and Estonia have become the first NATO members to pledge defense spending exceeding 5% of GDP, meeting a call made by former U.S. President Donald Trump. The announcement was reported by The Financial Times on Monday, Jan. 27.
Lithuanian Foreign Minister Kęstutis Budrys stated that starting next year, his country will allocate between 5% and 6% of GDP to defense spending and maintain that level at least through 2030. This represents nearly double Lithuania's current spending levels.
“Of course, there is pressure, and it’s good, constructive pressure from our strategic and largest NATO ally. We can’t ignore these signals. But that’s not the only reason... For us, it’s critically important to have real combat capabilities,” Budrys said.
Estonian Prime Minister Kristen Mihal commented on Lithuania’s announcement, stating that Estonia also plans to increase its defense spending to 5% of GDP, up from its current 3.7%.
“Our key security partner, under the leadership of the new president, has sent a clear message: NATO defense spending must increase. We know our adversary, and I fully agree—our target should be 5%,” Mihal said.
Budrys explained that Lithuania’s increase from its current 2.9% of GDP will be funded through state borrowing and potentially through joint European defense financing mechanisms. Meanwhile, Mihal suggested Estonia might implement public sector cuts to facilitate the spending boost.
European officials have noted that, due to Russia’s war against Ukraine, NATO may raise its unofficial defense spending target from 2% to 3–3.5% of GDP at its June summit. Former U.S. President Donald Trump has urged allies to go further, calling for spending to reach 5% of GDP, an idea supported by several NATO frontline states, including Poland, which already allocates more than 4% of its GDP to defense.
On Jan. 23, speaking at the World Economic Forum in Davos, Trump reiterated his call for NATO countries to increase defense spending to 5% of GDP.
“I’m also asking NATO members to increase their defense spending to 5%. Most nations haven’t even paid the agreed 2%. I insisted they pay, but they refused. So the U.S. always covered the difference, and that was unfair,” Trump said.
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