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The Seimas Approved the Proposal to Increase MoND Spending on Defence up to 2.52 Per cent of GDP

Date

2022 03 17

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Today, the Seimas approved the proposal of the Ministry of Finance to adjust the 2022 budget and to increase spending on national defence up to 2.52 per cent of gross domestic product (GDP). According to the Minister of Finance Gintarė Skaistė, such an adjustment will allow for an additional allocation of up to EUR 297.99 million to national defence and security this year. 

“We are now unanimous that we need to focus more on strengthening the national defence and security. In the context of Russia’s brutal aggression against Ukraine and international community as a whole, no compromises with V. Putin are possible — together with transatlantic partners we need to strengthen defence capabilities in the region, and additional funds for national defence of Lithuania will help to ensure this", says Minister of Finance Gintarė Skaistė.  

The draft Law Amending Article 14 of Law No XIV-745 On the Approval of Financial Indicators of the State Budget and Municipal Budgets for 2022, adopted by the Seimas, gives the Ministry of Finance the right to borrow on behalf of the State for fulfilment of the obligations of the Republic of Lithuania related to NATO membership — to secure up to 2.52 per cent of GDP following the GDP forecasts for Lithuania prepared by the Ministry of Finance on 22 December 2021. 

The Ministry of Finance would borrow on the basis of the actual necessity indicated by the Ministry of National Defence (MoND). The MoND is planning for these funds to acquire additional weapons, military equipment, munition, cyber security-enhancing equipment. 

Currently, the appropriations for the MoND foreseen in the Law for 2022 constitute 2.05 per cent of GDP following the OECD GDP forecast for Lithuania of December 2021, and amount to EUR 1,201 million. 

At the beginning of March, the Government adopted a decision under the provisions of the current budget law to allocate an additional EUR 40.43 million to the Ministry of National Defence from borrowed funds for support of the host country — expenditure needed to host NATO partner forces. 

Today, the approval of the Seimas to adjust this- year budget law allowed for an immediate allocation of up to EUR 257.6 million for national defence. 

The budgetary adjustment was adopted unanimously by 123 votes of the members of the Seimas in favour, 0 against and 0 abstentions.