Lithuania won't hesitate to borrow for defense - PM

VILNIUS - Lithuania is interested in taking advantage of increased borrowing opportunities for defense and will not hesitate to do so, Prime Minister Gintautas Paluckas says.

"Lithuania is interested in taking full advantage of the flexibility of the European Union's fiscal rules, which will allow for a significant increase in defense spending for member states that wish to do so," Paluckas told a joint press conference with Estonian Prime Minister Kristen Michal on Tallinn on Monday.

"We are ready to increase our defense investment without waiting for anything. Lithuania currently spends almost 4 percent of its GDP on defense and we will increase defense spending to 5-6 percent of GDP annually from 2026 to 2030," he said.

Lithuania expects the European Commission to decide by the summer to allow EU member states to breach fiscal discipline and exclude the 1.5 percent of GDP spent on defense from their overall budget deficit. This would allow borrowing more for defense

This measure is estimated to free up 650 billion euros over four years.

The EC is also proposing providing up to 150 billion euros in EU-backed loans to member states, with at least 60 percent of these funds going towards the purchase of arms from EU manufacturers.

The Lithuanian prime minister also said in Tallinn that he and his Estonian counterpart agreed on the need for the EU to "make serious decisions on defense investment" swiftly.

"Together with my counterpart, we support the European Commission's latest proposals and the way forward as set out in the Commission's White Paper on the future of European defense," Paluckas said.

Last week, Paluckas called the possibility of excluding the 1.5 percent of GDP spent on defense from the overall budget deficit "the only good thing" but the European defense plan.