Estonian Defense Minister Hanno Pevkur stated that the country’s military expenditures will “significantly” exceed 4% of its gross domestic product (GDP) next year, ERR reports.
Given the current size of Estonia’s economy, a 1% increase in defense spending relative to GDP would amount to approximately 400 million euros in additional expenditures. According to Pevkur, the current state budget strategy had initially allocated 3.7% of GDP for defense in 2026, but it is now evident that the figure will be higher.
The final number will depend on the proposals I present to the government, based on NATO’s military capability goals that will be agreed upon by all Alliance member states in June this year, the minister explained.
Additionally, calculations will take into account the additional needs of the Estonian Defense Forces, national military planning, and the costs associated with hosting allied troops.
The level of defense spending will be determined by the agreement we reach in the government, Pevkur noted, adding that he will provide preliminary estimates in the coming weeks.
Following this, the Ministry of Finance will be able to conduct detailed calculations to identify funding sources. Pevkur also confirmed that the ministry supports easing the EU’s budgetary rules, which currently limit the maximum budget deficit and national debt, to allow member states to increase defense spending more rapidly.
NATO Secretary General Mark Rutte and many European leaders agree that the current target of 2% of GDP is no longer sufficient to ensure Europe’s security in the long term.
