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Budget statement

The biggest part of the National Defence Budget 2017 will be used to enhance combat and combat support capabilities and combat training support of the Lithuanian Armed Forces 

 

Draft Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets submitted for consideration at the Government of million, or 1.80 percent of GDP (according to the macroeconomic indicator forecast of the Ministry of Finance, updated on 12 September 2016), which is by EUR 148.3 million or 25.8 percent more than the National Defence Budget 2016.

 

The budget of the Lithuanian national defence system has been balanced according to NATO requirements for the proportions of expenditure areas since 2015. According to these requirements, funding for personnel cannot exceed 50% and major procurement and upgrade of weaponry and materiel cannot take up less than 20% of the appropriations for the Ministry of National Defence. 

 

Draft budget 2017 proposes allotting around 43% of all appropriations for personnel and around 43% for contracts (investment and other property, weaponry and military equipment, war reserves, strategic, and non-expendable stocks. Around 14% of all appropriations is proposed to be used for running costs.

 

Priority areas for appropriations in 2017:

• Development of combat and combat support capabilities of the Lithuanian Armed Forces,

• Development of combat training support capabilities,

• Upgrading of C2 and cyber security capabilities. 

 

Draft Budget 2017 of the Ministry of National Defence proposes allotting up to 90% of all appropriations to military training of the Lithuanian Armed Forces and related areas.

 

Investment priorities in 2017 of the Ministry of National Defence are:

• Fulfilment of long-term contractual obligations in accordance to continuous investment projects of the national defence system,

• Development of C2, cyber security and intelligence systems,

• Development and upgrading of vehicle pools, special equipment, materiel and infrastructure for providing host Nation Support and for military training,,

• Development and upgrading of vehicle pools, special equipment, materiel and infrastructure for designated tasks of the national defence system.

 

In 2016 Lithuania allotted EUR 575.2 million or 1.5% of GDP; Lithuania had the fastest increasing annual defence spending among all NATO allies in 2014-2015.

 

Real annual change (%) of defence spending

 

 

 

Diagram of dynamics of the MoD appropriations in 2008-2017

 

APPROPRIATIONS FOR NATIONAL DEFENCE 2016

  

According to the Law of the State Budget, the appropriations allotted to the Ministry of National Defence (hereinafter MoD) in 2016 amount to EUR 575.2 million, including the Dotation to local municipalities in order to carry out the mobilization function, EUR 0.5 million. In comparison with the previous year, the MoD appropriations are EUR 150.2 million, or over 35%, higher.

 

In line with the priority measures of the implementation of the 2012-2016 Programme of the Government of the Republic of Lithuania, the priorities of the National Defence System for 2016, the tasks committed, increasing international commitments, and regional security situation, as well as in order to implement the agreement endorsed by parliamentary parties on increasing Lithuanian defence financing gradually to reach 2 pct. of GDP in 2020, the appropriations for MoD in 2016 amount to 1.48 pct. of GDP (GDP projection of September 2015, as notified by the Ministry of Finance).

 

In order to implement the mission of the National Defence System which aims for developing and putting into practice the Lithuanian Defence Policy by training the national armed forces capable of protecting sovereignty, territorial integrity and security of the citizens of the Republic of Lithuania on its own or in cooperation with allies, and also capable of contributing to global and regional stability, activity of the National Defence System in 2016 focuses on the following priority areas:

 

  • Further enhancement of integration with the European Union (EU) and NATO, closer interaction with member and partner states of both organisations, enhancement of the Eastern Partnership;
  • Modernisation and manning of the Lithuanian Armed Forces to ensure readiness for collective and individual state defence, also fulfilment of international commitments and support to allied presence in the region;
  • Enhancement of information and cyber security.          

 

In line with the set priorities, enhancement of NATO collective defence, implementation of the modern soldiers vision, organisation of draft into the Continuous Mandatory Initial Military Service and improvement of provision for draftees and their training and accommodation conditions, manning of combat, combat support, and combat logistics, increasing provision of weaponry and military materiel for units of the Lithuanian Armed Forces, formation of strategic and armed forces state defence commands, modernisation of air and maritime search and rescue system, development of military training area infrastructure, improvement of deployment conditions for rotating allied forces and NATO Air Policing Mission detachments in Lithuania, installation of cyber security information network, and development of public resilience to negative information sway.  

 

 

Distribution of National Defence System appropriations across expenditure sectors in 2016

 

 MoND BUDGET FOR 2016

 

 

MoD Budget 2016 prioritises modernisation of the Lithuanian Armed Forces in the following areas:

 

  • Development of combat and combat support capabilities of the Lithuanian Armed Forces;
  • Development of combat logistics capabilities;
  • Development of C2 and cyber security capabilities.  

 

The MoD programme organisation comprises 9 programmes. Major part of it, i.e., EUR 500.8 million, or 87℅ of all MoD appropriations, is allotted to armed forces services programmes of the Lithuanian Land Force, Air Force, Navy, military operations, logistics, Special operations Forces, and National Defence System personnel training. The programmes are directly targeted at increasing defence capacity and ensuring effective operation of the National Defence System, and implementation of the objectives of the Lithuanian Armed Forces both in national context, and in terms of the fulfilment of commitments regarding EU and NATO memberships.  

 

The other part of it, i.e., EUR 74.4 million or 13℅, of all MoD appropriations is allotted to two programmes: Centralized Services, and Formation of the National Defence Policy and Organisation of its Implementation. By providing for the MoD and other institutions of the National Defence System the Centralized Services facilitates implementation of the tasks of the institutions of the National Defence System. The Formation of the National Defence Policy and Organisation of its Implementation program ensures an efficient management of the National Defence System that helps setting appropriate guidelines for defence policy and international cooperation, planning target capabilities of the Lithuanian Armed Forces and their further development, planning defence spending in line with NATO standards, and employing the appropriations for the National Defence System rationally so that the planned goals are achieved.

 

 National Defence System appropriations in 2007-2016

 

 

 

Notes:

1. Data on implementation of the MoD Budget is provided for 2007-2015, and approved plan of appropriations is provided for 2016.

2. Data for 2007-2013 is provided in accordance to the contemporary GDP and prices.

3. Data for 2014-2016 is provided in accordance with GDP projection of September 2015 announced by the Ministry of Finance.

 

More information on all public revenue and expenditure of Lithuania in 2016 may be found at: Ministry of Finance.

 

  

 

Appropriations for the National Defence System in 2015

 

Appropriations allotted to the Ministry of National Defence in 2015, including the appropriations for subsidising municipalities in order to carry out the mobilization function, amounted to EUR 424.9m, or 1.15% of GDP (according to GDP projection of September 2015 given by the Ministry of Finance).

 

 

Implementation of NDS appropriations in 2015 across expenditure sectors

 

MoND BUDGET FOR 2015

 

Budget Execution 2015

424,9 million Eur

(1,15 % of GDP)

 

 

Information by the Finance and Budget Department of the Ministry of National Defence

 

 

 

 

 

 

Updated on: 2016.10.25
Solution: Fresh Media