As of 2012 the Defence budget or the Ministry of Defence’s governing minimum amount is 2% of the gross domestic product. This supports a military national defence with a balanced and sustainable development as well as meeting NATO recommended military expenditures.
2% GDP supports a sustainable and balanced development of national defence
As of 2012 there has been an agreement between the political parties of the government to support and maintain the defence budget at a 2% GDP expenditure. Military expenditures represent approximately 4.5% of the total state budget. This is one of the smallest items in the budget. This guarantees the defence expenditure to be maintained at 2% of the gross domestic product supporting a sustainable and balanced development of national defence.
The opportunity to support military exercises and up to date equipment for individuals
Maintaining a defence expenditure of 2% GDP allows to keep personnel,- activities- and investments at an approximate equal level and within the defence budget.
Development of capabilities supports stable funding
2% GDP allows long term and constant planning of Defence Forces development.
New military capabilities, armaments and sustainable planning of Defence Forces development requires longer perspectives than a one year budget. The defence
sector must be able to have long term commitments, often several year undertakings, consequently assurance of the size of the defence budget must be agreed upon. Previous investments can become senseless if programs are suddenly ended due to a reduction in resources. The 2% GDP expenditure for national defence allows for planning on a long term basis as well as efficient use of taxpayers’ money.
Estonian defence budget 2021
The long-term and resource-conscious planning of national defence will continue with the 2021 defence budget. In 2021, defence spending will increase to EUR 645.5 million, which is 2.29% of projected GDP. This includes the costs associated with hosting Allies, which is approximately EUR 10 million in 2021, as well as additional defence investments of EUR 20 million. Estonia is strengthening its military capabilities through large-scale procurements of equipment. Personnel costs in 2021 will remain unchanged from 2020.
The basis for the development of independent defence capabilities is the development of the units listed in the National Defence Development Plan 2017–2026 into combat ready units that are equipped, manned, trained and supplied. A total of EUR 46 million will be added in 2022 to the National Defence Investment Programme, which will be maintained at the current level of EUR 20 million per year throughout the state budget strategy period.
During the period 2021–2024, the implementation of the activities approved in the National Defence Development Plan 2017–2026 will continue, to which the procurement of coastal defence armaments will be added. Funding for national defence will continue at the planned level, with an additional EUR 46 million being added to the funds already requested by the Ministry of Defence and the previously decided national defence investment programme, for the procurement of a coastal defence system. This decision is based on the military advice given by the Commander of the Defence Forces during the preparation of the new National Defence Development Plan.
Supplementing and upgrading equipment and ammunition improves combat readiness. Weapons will be replaced – the introduction of new handguns will continue, and new machine guns, long-range anti-tank missile systems, anti-tank grenade launchers, and sniper rifles will be introduced. In order to increase the combat capability of its brigades, the deployment of self-propelled artillery will continue. The reconstruction of CV90 armoured combat vehicles will take place during the period 2021–2023. In addition to a number of already fully equipped units, the Combat Service Support Battalion, the Engineer Battalion, Military Police companies, and six additional territorial defence companies will all be fully equipped during this period. The central command capabilities of the Defence Forces will be developed to a significant extent, situational awareness will be improved, including with regard to NATO-compliant maritime surveillance, and a tactical communication and control system will be developed, which includes, among other things, interoperability with our Allies. Attention will continue to be paid to ensuring adequate ammunition stocks.
The supplementing of equipment and ammunition will continue. The Artillery Battalion will focus on the development of self-propelled artillery and the training of the first sub-units will begin. Anti-tank companies from the 1st and 2nd Infantry Brigade will both be switching over to modern long-range weapons systems. Ammunition will be procured for all units. Military vehicles, personal equipment, communication and IT equipment will be procured in order to supply the 2nd Infantry Brigade. To improve the training conditions, the Central Training Area will be further developed, to create suitable conditions for infantry fighting vehicles. Development of the Nursipalu training area will also continue. Mobile coastal surveillance radar systems and force protection launches will be adopted by the Navy. All military territorial defence units will be equipped with personal protective equipment and military vehicles. Ammunition will be procured for all units. In 2020, the supplying of new flak jackets and body armour to the wartime structure began and will continue.