The VGT, made up of the heads of the country and the national defense system, announced on Friday that it had agreed that from the next year to 2030, defense funding should reach 5-6 percent. (GDP), and the main goal is to develop the army division faster.
President Gitanas Nausėda stated that the agreement will allow maintaining 5.5 percent. GDP defense funding average for the mentioned period.
This year, slightly more than 3 percent is planned for national defense. GDP, but the new Government, which increased the borrowing limit by about 800 million euros, claims that it will allow to reach 4 percent. GDP allocations.
However, this means that funding will have to be increased by at least 1 percentage point of GDP per year.
CEO of Swedbank economist Nerijus Mačiulis, who reacted to this news on his Facebook account on Friday, also provides calculations.
“Now about the money. Such a commitment would mean an additional 2 billion euros already next year and about 2.5 billion at the end of the decade (more than 10 billion euros in total),” he assures.
N. Mačiulis also names possible sources, and as one of them – greater borrowing.
SEB bank economist Tadas Povilauskas also writes on his Facebook account that after these plans we need to wait for “bold proposals from the Minister of Finance”.
If VGT’s decisions are implemented, it will be necessary to borrow a lot. Only as in business – you can’t 100%. to finance the project with borrowed money, you also need to contribute equity (all of our money through taxes). It’s even better that EU funding also contributes,” he writes.
At that time, R. Vilpišauskas says that borrowing is probably the only realistic option.
“I see such an opportunity only with additional borrowing,” admitted an expert from the Institute of International Relations and Political Sciences of Vilnius University.
By the way, after the VGT meeting, President Gitanas Nausėda discussed defense matters with NATO Deputy Secretary General Radmila Šekerinska. Among other things, he mentioned that 3 percent GDP should become a new “floor” for NATO allies.
The VU TSPMI professor admitted that these messages did not just appear at this time, but had a specific purpose.
Source: www.15min.lt
