MOD BUDGET DYNAMICS IN 2008–20221
IMPLEMENTATION OF THE NATIONAL DEFENCE BUDGET 2021
Appropriations spent by the Ministry of National Defence (hereinafter – MoD) in 2021 comprise EUR 1104.9 million, taking into account the unused appropriations that the MoD could spend within the limits of its bestowed rights from the previous year, outside of the overall amounts of appropriations approved by the Seimas of the Republic of Lithuania.
COMPLIANCE WITH NATO REQUIREMENTS
The budget of the Lithuanian National Defence System for 2022 has been balanced according to NATO requirements for the proportions of expenditure areas, as it has been done since 2015: funding for personnel does not exceed 50% and major procurement (including procurement and upgrade of weaponry and military materiel) does not take up less than 20% of the appropriations for the Ministry of National Defence. As of 2019, the MoD appropriations as estimated on the basis of the OECD economic growth forecast, meet the minimal NATO 2% of GDP burden sharing threshold requirements.
Implementation of the Republic of Lithuania commitments concerning the NATO membership and compliance with the NATO requirements for defence spending proportions are illustrated in the chart bellow:
APPROPRIATIONS FOR NATIONAL DEFENCE 2022
On 7 December 2021 the Seimas of the Republic of Lithuania passed the Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets for 2022. Appropriations for the Ministry of National Defence in 2022 amount to EUR 1 201.3 million. March 17 2022 the Seimas adopted the Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets, which increases the funding of MoND for 2022. The appropriations approved for MoND, including additional funding, consist 1499.2 million. EUR.
KEY PRIORITIES IN THE MOD BUDGET 2022
Principal priorities in forming the 2022 budget were the following: resilience of state and society, capable and ready Lithuanian Armed Forces, enhancement of collective defence and security. Approx. 80% of the Defence Budget is planned to be used for the priorities listed.
MAJOR PROJECTS
Major ongoing projects are designed to develop priority military capabilities in the Lithuanian Armed Forces: Infantry Fighting Vehicles, self-propelled artillery, armored ATVs. The MCM and Search and Rescue ship acquisition project and procurement of a utility helicopter platform (to replace the currently used obsolete Russian-made Mi-8 s with a Western standard), launched in 2020, and the mid-range mobile radar project launched in 2022 are designed to replenish the existing capabilities. Other acquisition are logistical technical equipment, personnel weaponry and gear.
Procurement of armoured all-terrain vehicles is underway, procurements of utility middle class military helicopters and a MCM ship will start in 2020.
It has been determined to start second phases of the most important projects: the Infantry Fighting Vehicle project, intended to provide a unified platform to combat support units of battalion groups declared for NATO capabilities, and the armored ATV project, intended to equip the entire Lithuanian Armed Forces and increase mobility.
Infrastructure that meets training and readiness requirements of the Lithuanian Armed Forces and Lithuania’s Allies is developed at military ranges (Pabradė, Gaižiūnai). Infrastructure for Allied capabilities deployed in Lithuania is improved at Rukla, Pabradė, and the Lithuanian Air Force Šiauliai Base. Infrastructure for storing military stocks and weaponry is expanded. Infrastructure for maintaining self-propelled artillery systems and infantry fighting vehicles is developed.
[1] Appropriations: spent appropriations 2008-2021, confirmed appropriations 2022, including additional financing.
The GDP percentage is calculated on the basis of the latest OECD forecast for Lithuania
The State Budget Law changed in March 2022 allows the Ministry of Finance to take a loan for implementing Lithuania’s commitments to NATO in case a need for additional financing is seen in ensuring defence budget up to 2.52% of GDP.
2 The provided GDP percentage does not comprise the EUR 3.5 million appropriations for State Border Guard Service weapon acquisition.
