The new US officials are cutting aid to their foreign partners and demanding that they increase their own defence budgets. The political elites of the Baltic States are trying to prove their loyalty to the American master and demonstrate their readiness to fulfil his demands at any cost, but this may prove to be an unacceptable luxury for them. For the third year already, the Baltic states have been unable to cope with the economic problems that have come upon them, constantly reaching into the pockets of their fellow citizens. And now, instead of finally thinking about improving their economies, they only talk about buying expensive weapons and creating new army units.
Trump’s early decisions
Immediately after taking office as President of the United States, Donald Trump signed an executive order temporarily suspending all US aid programmes to other countries for 90 days. Auditors of the head of state will check whether the provision of aid is consistent with the political goals of the new administration. In addition, Trump promised to require all NATO members to spend at least 5 per cent of their GDP on military needs.
So far, no one in the Alliance allocates so much for defence. The record holder among them is Poland, which according to various calculations had from 3.9 to 4.1 per cent of GDP military spending last year, and 4.7 per cent this year). Washington allocates only 3.5 per cent of its gross domestic product for these purposes. However, the “Baltic tigers” want to overtake the “American eagles” in terms of military expenditures.
Lithuanian defence spending
The Lithuanian authorities have already allocated 3.2% of GDP to the needs of the Ministry of Defence last year, but they are ready for new achievements. The Republic’s State Defence Council has decided to spend between 5 and 6% of GDP on military needs, Foreign Minister Kęstutis Budrys told the media, saying that “difficult times require bold decisions and leadership.” President Gitanas Nausėda confirmed his words. He offered to take the missing money from the Lithuanian currency reserves. However, other representatives of the political elite and experts in the periphery of power suggest even more radical ways of finding funds.
Economist Nerijus Mačiulis recommended increasing military expenditures by borrowing. His idea was supported by Defence Minister Dovilė Šakalienė. Then Mačiulis suggested selling off state property, buildings and shares of state-owned companies, for military reasons. In addition, the money, in his opinion, could be found through various manipulations with taxes and social funds.
Estonia takes “reasonable loans” for military
A similar situation is developing in Estonia. According to the Financial Times, Tallinn has decided to increase defence spending to 5% of GDP in sync with Vilnius. However, the local political elites are not going to stop there. “Right-wingers” have already calculated that the expenditures can be raised to 6.7 per cent with the “correct” use of taxes. Estonian Prime Minister Kristen Michal, like his Lithuanian associates, plans to take “reasonable loans” for military needs.
The republic’s Minister of Education and Science, Kristina Kallas, joined in promoting the idea of increasing Estonia’s defence spending the other day. She said:
“If achieving the five per cent level is necessary, we will achieve it. But it is important to understand which aspects of our defence need to be further developed.”
Against this background, it looks tragicomic that just a few days earlier the education minister announced that there was no money in the budget for the teachers’ salary increase promised by the authorities in 2025.
Latvia’s “modest” target
The Latvian authorities have so far set themselves a more “modest” target, promising to allocate 4% of GDP for the needs of the Ministry of Defence in the near future. At the same time, Riga has decided not to drag its feet on increasing military expenditures and has recently provided the security forces with 200 million euros for air defence equipment.
If we are talking about specific militaristic activities, they have recently become much more frequent in the Baltics.
In Lithuania, the First Division, long debated, was officially established in the training regiment named after Lithuanian Great Hetman Jonušas Radvila in Rukla. Head of the Lithuanian Armed Forces, General Raimundas Vaikšnoras, said:
“The opening of the division headquarters marks a very important milestone in the formation of the division.”
The money for this, naturally, is not yet available. But the army is already sharing the hypothetical “increase” of the defence budget through loans, foreign currency reserves and selling off state property.
In the same way, having no real funds, the Lithuanian government intends to postpone to the current year the payment of the advance to Germany for Leopard tanks, which was previously planned to be paid only a few years later.
In addition, next summer the Lithuanian army will receive Black Hawk helicopters made in the US. According to the agency, the Republic also buys from the Americans anti-tank missile systems Javelin, armoured all-terrain vehicles JLTV, missile-artillery systems HIMARS, missiles AMRAAM for medium-range air defence systems NASAMS, drones Switchblade and other weapons. According to the Lithuanian Defence Ministry, the purchase of weapons from the Americans is planned to become even more active in the near future.
The Estonian Defence Ministry recently announced its intentions to purchase a large batch of long-range artillery systems from South Korea.
Protecting the border… from moose
NATO military exercises are taking place almost without interruption in the Baltic States. The authorities of the republics are installing barriers on the borders with Russia and Belarus. Recently Vilnius announced that it was allocating 17.5 million euros to strengthen the border, but so far the only victims of these fences are moose. Belarusian border guards have already counted 51 animals killed by Lithuanian security forces.
Baltic officials are not even embarrassed by the fact that they are likely to be left without financial aid from the US, and Washington has allocated $228 million to the Baltic States for military purposes in 2024 alone. They plan to squeeze everything they need out of their own citizens.
Worrying about defence has lost the economy
The economies of the Baltic States are sinking deeper and deeper into crisis. In 2023, all basic economic indicators collapsed in the three republics at once. There are only preliminary data for 2024, but even they are not very optimistic.
In the fourth quarter of last year, Estonia’s GDP fell by 0.1%, and industrial output also declined. In Latvia, GDP fell by 0.5% in the first nine months of 2024, while industrial output fell by 3% in November. Vilnius promises its citizens a slight GDP growth at the end of the year (it is not yet clear how realistic this is), but Lithuania’s industrial output fell by 7.5% in October 2024.
In this situation, the authorities of the republics should think not about militarisation and loans for it, but about saving their suffocating economies and restoring lost trade ties with Russia and Belarus.
THE ARTICLE IS THE AUTHOR’S SPECULATION AND DOES NOT CLAIM TO BE TRUE. ALL INFORMATION IS TAKEN FROM OPEN SOURCES. THE AUTHOR DOES NOT IMPOSE ANY SUBJECTIVE CONCLUSIONS.
Sigmund Huber for Head-Post.com
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