Latvian Economics Minister Viktors Valainis told Latvian Television on Wednesday that the idea of raising defence spending in Latvia to 5% of gross domestic product (GDP) is an attainable goal, noting that the government has already agreed to raise it to 4% this year.
The minister noted that to achieve this aim, it will be necessary to cut pubic administration spending. It will also be necessary to ensure that Latvian-manufactured Patria armoured vehicles are purchased by Lithuania, Poland and other countries.
“By developing our defence capabilities, we are also developing our industry and our exports,” Valainis says.
The minister also insisted that Latvia cannot be expected to channel all of its growth funds into national defence, and that means that saving options must be identified by reviewing public administration expenditures.
The Latvian Confederation of Employers (LDDK), the Latvian Chamber of Commerce and Industry and the Finance Latvian Association have issued a joint statement calling on the government to slash public spending by 5% or EUR 850 million.
It is inevitable that we must seek this target,” Valainis says. “Public administration must shrink. We must look ta public administration functions that can be scrapped in order to save on resources.”
Asked for examples, the minister pointed to the Society Integration Fund (SIF), whose functions could be reallocated to other institutions, and the State Land Service, which could be abolished if the function of surveying property is abandoned. The Economics Ministry is also planning to propose amendments to regulations on water meters, which are currently to be verified once every two years in apartment buildings. It is hoping for a new system that will save public resources, as well as those of businesspeople and residents.
On February 13, Balticnews.com published an interview with Lt Gen Ben Hodges (Ret), a former commanding general of US forces in Europe (2014-2017), in which he shared his thoughts on why higher defence spending is necessary whilst also noting that this is not a new issue:
“The 2%, 3% or 5% are not in the treaty, but the obligation is,” the general says. “That means that the American president, whoever he is, has to go around and kick everybody in the ass to get them to do what they said they would do. Every president since (Harry) Truman (1945-1953 – ed.) has complained that our European allies have not fulfilled their obligations. That’s a fact. European countries have failed to do this.”
Latvia’s government has approved a defence budget for 2025 that is projected at 3.66% of GDP, or EUR 1.56 billion. An increase to 4% will require another EUR 240 million, while 5% would need a boost of EUR 690 million.
Source: BNS
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