Baltic states, Poland urge EU to boost defence budget by €100 billion

The European Union must significantly increase its defence spending, doubling its current budget to meet urgent needs of at least €100 billion ($104 billion), according to a proposal from four EU member states that share borders with Russia.

According to international media reports, Lithuania, Estonia, Latvia, and Poland have jointly prepared a paper urging the EU to explore joint borrowing, expand the European Investment Bank's role in defence, and collaborate with external European partners, including the UK, per Caliber.Az.

The countries, which have been at the forefront of supporting Ukraine against Russia's invasion, highlight that current EU military spending is estimated at €326 billion for 2024. They argue that in order to reach a target of 3% of gross domestic product for defence spending and to be prepared for extreme military contingencies, the EU must increase this expenditure significantly.

The EU is in the process of crafting a new defence strategy, with informal meetings scheduled for Monday in Brussels to gather input from member states. The finalized blueprint is expected in March, with the goal of adopting a plan by the end of the year. While there is consensus on the need for an overhaul of Europe's defence capabilities, there is divergence on how to achieve these goals.

Notably, some countries, including Germany, have long opposed the idea of joint borrowing for defence purposes. US President Donald Trump has previously called for NATO members to allocate 5% of their GDP to defence, a target even the US has yet to reach. European Commission President Ursula von der Leyen has also emphasized the need for at least €500 billion in defence investments over the next decade, but the four countries stress that immediate action is required and cannot be delayed until the 2028 budget cycle.

The paper warns that Russia has already begun ramping up its military forces, producing three times as many artillery shells as Europe and the US combined. The EU also faces significant challenges due to its reliance on supply chains from Beijing and the growing military cooperation between Russia, China, Iran, and North Korea.

The proposal outlines several urgent priorities for the EU, including at least €50 billion to boost artillery production and strategic stockpiling. It also calls for sustained military support to Ukraine, which has increased its industrial capacity but still requires funding. To help fund this support, the paper suggests the EU seize frozen Russian central bank assets, although such a move has been controversial, with countries like Germany and Belgium opposing it.

Other critical priorities include the development of a European air and missile defence shield, reinforcing the EU’s borders with Russia and Belarus, and improving the ability to mobilize and deploy military forces. The paper also recommends that the EU work more closely with NATO to ensure alignment of standards and objectives, and suggests setting surge capacity targets for crucial capabilities such as air defences, ammunition, and electronic warfare tools that can be rapidly deployed.

Finally, the four countries emphasize that the EU should not limit its defence procurement to suppliers within the bloc, advocating for a more open approach to defence industry cooperation beyond member states, particularly given the current limitations in capacity. Some EU capitals have pushed for most defence spending to stay within the bloc, but the four nations argue this is not feasible.

By Tamilla Hasanova