Estonia boosts defence spending to 5% of GDP

Estonia will increase defence spending to at least 5% of its GDP by 2026, the government announced on 18 March.

This increase, up from 3% this year, will exceed 5% over the coming years, reinforcing the country's ability to defend itself against Russia, the government added. 

It follows advice from the Commander of the Estonian Defence Forces, Major General Andrus Merilo, to rapidly bolster defence spending and the country's military capabilities. Estonia’s Ministry of Defence (MoD) and Ministry of Finance will develop a financing plan for the rapid implementation thereof, with the plan being discussed with the government in April. 

This funding increase aims to bolster the military's capabilities across a range of areas, including air defence, electronic warfare, and the development of deep-strike systems. 

“Our task is to make these developments as quickly as possible. We need to get used to the idea that defence spending will remain at 5% of the GDP for a long time and will rise above that in the coming years”, the Minister of Defence Hanno Pevkur said.

The additional funding is possible due to the European rearmament plan – ReArm Europe – which aims to raise up to EUR800 billion to boost Europe’s defence capabilities, the government stated.

The ReArm Europe, unveiled in early March, relaxes the EU’s debt rules, allowing members to increase defence spending without fear of fines or penalties. This will enable members to raise spending by 1.5% of GDP on average.

In January, the Estonian MoD unveiled its new procurement development plan, spanning 2025-2028. In total, EUR5.5 billion is being allocated over this period for equipment, with ammunition a priority. Medium-range air defence systems, armoured vehicles and wheeled self-propelled howitzers are also priorities.