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Estonia: Government Boosts Defense Spending in 2019 Budget Bill

(Nov. 14, 2018) The government of Estonia approved the 2019 Budget Bill on September 26, 2018. (Press Release, Government of Estonia, Government Approves Budget for 2019 (Sept. 26, 2018), Government of Estonia website (in Russian).) The 2019 Budget Bill envisages total expenditures of 11.31 billion euros (€) (about US$12.8 billion). Owing to a positive economic outlook, the government is not planning to increase the tax burden in its 2019 Budget Bill. (Id.) Under Estonia’s Constitution, the Bill must be approved by Parliament in order to become law. (EESTI VABARIIGI PÕHISEADUS [CONSTITUTION OF THE REPUBLIC OF ESTONIA] art. 115, President of Estonia website.)

Several sectors (Health and Unemployment Funds, Public Transport Subsidies, Investments, and Defense) will see increase in expenditures. Under the 2019 Budget Bill defense expenditures will total €594 million (about US$677 million), which is more than 2.1% of the GDP. The government aims to increase the salaries of military personnel and boost military procurement, with the latter category making up as much as 40% of defense expenditures, according to the 2019 Budget Bill. (Government Approves Budget for 2019, supra.)

Estonia, as a NATO member country, committed itself to increasing its military spending at the 2014 NATO Summit in Bucharest to at least 2% of its GDP. In 2019, Estonia will become one of six NATO member countries to reach the 2% target. The other countries are the United States, Greece, the United Kingdom, Romania, and Poland. (Niall McCarthy, Defense Expenditures of NATO Countries, STATISTA (July 11, 2018).)

The increase in defense spending in the 2019 Budget Bill is also in line with the 2019–2022 State Budget Strategy approved by the government of Estonia on April 27, 2018. (Ministry of Finance, Riigi Eelarvestrateegia 2019–2022 [State Budget Strategy 2019–2022], Apr. 27, 2018, Government of Estonia website (in Estonian); Press Release, Government of Estonia, Government Approved the State Budget Strategy for 2019–2022 (Apr. 27, 2018), Government of Estonia website) (contains summary of State Budget Strategy).)