Possibilities of covering additional defense investments discussed in Estonian parlt

TALLINN – Foreign Minister Margus Tsahkna, as acting prime minister, said during question time in the Estonian parliament on Wednesday that in order to make additional investments in national defense, both the issuance of defense bonds and the introduction of an extraordinary defense tax must be considered.

Tsahkna said that Estonia is facing a very serious security threat coming from the east and the country has already managed to significantly increase defense spending.

"The 3.2 percent of GDP, [to which extent] we are spending on defense this year, this level must remain even despite all the difficult decisions we have to make in terms of the state budget, because we have to invest in our defense and security," he added.

Responding to MP Tonis Lukas' question on the options the government has discussed to cover additional defense costs, Tsahkna said it is important to start the economy through investments, innovation, smart solutions and by ensuring that the industry is able to export.

"It all takes time. No matter which government there is, it all takes time, but defense does not wait," he said.

According to Tsahkna, Estonia ultimately has three options. He first highlighted the idea that the Estonian state should or could issue bonds for additional defense investments.

"We have to take this very seriously. Because if we look at the recommendations of the commander of the defense forces, Gen. [Martin] Herem, we are talking about an additional need of over a billion over the next few years, especially when it comes to increasing ammunition capacity," he said.

Secondly, he mentioned the possibility of issuing defense bonds at the level of the European Union.

"Today, security is an issue for the whole of Europe, it is an issue for the whole of NATO, and if we could issue 100 billion euros' worth of defense bonds at the level of the European Union, then the whole of Europe, as well as us as Estonia, would gain a lot in this region," Tsahkna said.

Thirdly, he brought up the issue of taxes, but confirmed that, for example, the increase of VAT has not been discussed to cover the needs of defense investments.

"However, at the level of the government coalition and also publicly, we have talked about the fact that perhaps we need to discuss the introduction of an extraordinary defense tax. What components it should consist of is namely a question for public debate," Tsahkna said.