IMPLEMENTATION OF THE NATIONAL DEFENCE BUDGET 2023
In 2023, Lithuania’s defence spending increased by €352.8 million or almost 22% compared to the previous year. To maintain the 2.52% of GDP level according to the Ministry of Finance’s economic scenario updated in December 2022, an additional allocation of around €97.6 million was made to the Ministry of National Defence (MoND) in the first quarter of 2023. In addition, €128.3 million was made available for the financing of military infrastructure, including €117.0 million under the Law on Temporary Solidarity Contribution and €11.3 million from funds borrowed on behalf of the State. After taking into account the unused appropriations from the previous year authorised to be used under the powers conferred on the MoND and not included in the total appropriations approved by the Seimas of the Republic of Lithuania, the MoND’s allocations used over the 2023 period amount to €2,001.7 million.
APPROPRIATIONS FOR NATIONAL DEFENCE 2024
On 5 December 2023, the Seimas of the Republic of Lithuania adopted the Law on the Approval of Financial Indicators of the State Budget and Municipal Budgets for 2024. The appropriations approved for the MoND in 2024 amounted to €2,091.7 million, including €134.8 million from the Law on Temporary Solidarity Contribution and €31.4 million from the European Peace Facility for 2023-2027. In addition, in the course of 2024, an additional amount of €58.1 million has been allocated to the MoND, of which: €48.5 million for participation in international initiatives to assist Ukraine, €7.9 million for the progress of the National Cyber Security Development Programme, €1.5 million for the development of the capability of unmanned aerial vehicle (UAV) of the Lithuanian Riflemen’s Union, €0.2 million to finance other MoND’s needs. Taking into account the unused appropriations of the previous year, which were authorised to be used by the MoND through the powers conferred on it without including them in the total appropriations approved by the Seimas of the Republic of Lithuania, and given the additional appropriations, the total MoND appropriations for 2024 amount to €2 292.0 million.
KEY PRIORITIES IN THE MOND BUDGET 2024
The main priorities for the 2023 budget are a strong and ready Lithuanian Armed Forces, strengthening collective defence and security, and the resilience of the state and society.
Hundreds of important arms and equipment acquisition projects for the LAF are to be completed in 2024 and will continue to be successfully implemented, which will significantly enhance the LAF’s combat power, troop protection, land maneuver, air defence, intelligence and logistics capabilities.
This year, key projects such as combat drones, mine countermeasures and search and rescue vessel, radars for patrol vessels, counter-unmanned aerial systems (part of the types), unarmored all-terrain vehicles (Phase I) are planned to be completed. The acquisition of multi-purpose engineering equipment and machinery required for the reconstruction of the Rūdninkai training ground and the Lithuanian Air Force Air Base will also be completed.
The following major projects are progressing well:
- the continuation of the development of the High Mobility Artillery Rocket Systems (HIMARS);
- Phase II of the Medium Range Air Defence Systems;
- Phase II of the JLTV armoured all-terrain vehicles;
- Phase II of 155 mm howitzers;
- medium Range Mobile Radars,
- artillery radars,
- multi-purpose helicopter platforms;
- electronic warfare equipment.
Soldiers and reserve troops are also provided with individual weapons, equipment and individual CBRN protective equipment. The weapons procured under these projects will reach the Lithuania Armed Forces over the coming years.
The procurement of MSHORAD mobile air defence systems has started this year. Besides, subject to the availability of additional appropriations, the procurement of IFV Phase I engineering vehicles is planned to start earlier, and discussions are under way to initiate the procurement of national divisional aggravating elements and air defence enablers.
The arms acquisition projects are coordinated with ammunition acquisitions. In total, more than 45% of the defence budget is planned to be spent on modernisation of the Lithuania Armed Forces in 2024.
The development of key LAF infrastructure continues, with priority given to improving conditions for military training, host nation support, storage and maintenance of newly acquired weapons and ammunition storage. The main focus is on the development of the infrastructure of the German Brigade (with additional funding from the Temporary Solidarity Contribution), the development of the main LAF training ranges in Rūdninkai, Pabradė and Rukla, as well as the infrastructure of the Lithuanian Air Force Air Base, the construction of new barracks in various units of the LAF, and the reconstruction and renovation of existing barracks and the construction of ammunition storage facilities.
COMPLIANCE WITH NATO REQUIREMENTS
The MOND maintains the defence expenditure proportions set by NATO: no more than 50% of the MoD’s total allocation for personnel costs and no less than 20% of the MOD’s total allocation for acquisitions (procurement and modernisation of armaments and military equipment), and is in line with NATO’s requirements of a 2% of GDP allocation for defence.
