Estonian government ramps up defence spending for 2026

The Estonian government has officially decided to increase its defence spending up to reach 5.4 per cent of its gross domestic product (GDP) in 2026. 

This was announced by Estonian Defense Minister Hanno Pevkur via his official X page on April 24, Caliber.Az reports.

Historic decision - Estonian defence spendings will increase to 5,4% already 2026! @Kaitsevagi @EstonianGovt @MoD_Estonia pic.twitter.com/bHwndIHKhg

— Hanno Pevkur (@HPevkur) April 24, 2025

The "historic decision", as the MoD minister described it, has been in the planning for a while, with Prime Minister Kristen Michal having revealed those plans back in January. 

“Our key security partner, under its new @POTUS, has made it clear: NATO members must raise their defense budgets. We know our adversary, and I fully agree — 5% should be our target. Although we planned 3.7% for 2026, we need to accelerate our investments,” Michal wrote back then on social media. 

The PM emphasized that the increase wouldnot come from new taxes but instead be sourced through a mix of EU funds, cuts in public spending, and smart borrowing. Michal also expressed readiness for wide consultations within Estonia and discussions with EU partners at the European Council. The decision follows the wider trend of European countries ramping up their defence budgets amid the changing geopolitical climate and risks to the European security architecture, namely Washington's retreat from defence promises and a tougher stance towards NATO. 

Estonia, which borders Russia and has a significant Russian-speaking minority, joined NATO in 2004 along with other Baltic and former Warsaw Pact countries. Despite its small population of under 1.5 million, Estonia spent around 1.5 billion euros on defense last year which, while surpasses the NATO guideline of 2.5 per cent of GDP unlike the case for other alliance members, is in comparison about fifteen times less than that of a country that has less security risk exposure, like that of the Netherlands (population 11 times larger.) 

By Nazrin Sadigova