September 26, 2019

Estonia’s 2020 draft defence budget

Estonian army soldiers march during the Independence Day parade in Tallinn, Estonia February 24,
Estonian army soldiers march during the Independence Day parade in Tallinn, Estonia February 24,

On 25 September 2019, the Government of Estonia agreed to the 2020 draft state budget, which obviously includes the defence budget.

The budget includes few surprises, bearing in mind that since 2015 Estonia has already met and exceeded the 2% spending target agreed upon at the Wales Summit. Still, as we look forward to December and the London meeting of NATO Heads of State and Government  where burden-sharing certainly will be on the agenda, there remain some aspects along the lines of the three C’s (Cash, Capabilities, and Contributions) that deserve to be noted.

As has been the case for a number of years, Estonia plans to allocate at least 2% of GDP for defence as a baseline. On top of this, Estonia will provide funding related to Host Nation Support to Allied forces (the enhanced Air Policing detachment at Ämari Air Base, the UK-led enhanced Forward Presence Battlegroup in Tapa and the NATO Force Integration Unit in Tallinn). In addition, the extraordinary Defence Investment Programme, launched in 2018 to speed up procurement related to critical shortfall areas (primarily ammunition), will be extended to at least 2023. These three elements in total are currently estimated to equate to 2,11% of GDP in 2020.

The Defence Investment Pledge agreed to at the Wales Summit does not only encompass the well-known 2% spending target but also aims to devote at least 20% of each Ally’s defence budget on major equipment, including related Research & Development. Estonia plans to achieve this target in 2020 by spending 21,17% (up from 19,37% in 2019) of its defence budget on major equipment.

As for capability development, the draft 2020 budget includes funding to improve Maritime Situational Awareness and information exchange with other Baltic nations and with NATO. The army will continue with the introduction of CV9035 Infantry Fighting Vehicles while receiving first deliveries of K9 self-propelled howitzers, Eurospike anti-tank missile systems and assault rifles from LMT.

Earlier in September, the government proposed to the Parliament that Estonia should continue to contribute to ongoing international operations in Afghanistan, Iraq and the Mediterranean while doubling its contribution to Operation Barkhane in Mali by deploying special forces and by adding medical personnel, Forward Air Controllers and an Explosive Ordnance Team to the existing contingent. Next year Estonia also plans to contribute to the NATO Response Force with up to 210 personnel.

All in all, the 2020 draft defence budget supports the continuing modernisation of the Estonian Defence Forces. Still, with the evolving security environment kept in mind, questions remain as to whether this will be sufficient. Without doubt, these questions will be considered next year during the drafting of a new National Defence Development Plan for 2021-2030.