Additional defense funding will wait for the lessons of the war in Ukraine

One of the specific capability developments in the new national defense development plan is the creation of a multi-missile launcher unit. Photo: Kaitseministeerium

Estonia’s political parties, largely due to the war in Ukraine, have reached an agreement about the need to increase defense spending and the minister of defense says that the ongoing war in Ukraine will have to show whether the national defense development plan should be speeded up or something else should be developed instead.

Lieutenant General Martin Herem, Commander of the Defense Forces, said that he would always be glad to receive money, bit it is for the government to decide on account of which the defense spending would be increased.

Minister of Defense Kalle Laanet (Reform) held a press conference together with his British colleague Ben Wallace in the tense situation and also commented on the possible increase of defense spending.

300 million spent on ammunition

“I believe that we must definitely review how to advance the developments listed in the ten-year action plan. We have already made certain decisions,” said Laanet, referring to the 340 million additional allocations for national defense. “Life after February 24 shows that additional defense allocations must come.”

According to Magnus-Valdemar Saar, Director of the Center for Defense Investment, majority of the additional funding has already been spent on ammunition. “A large share of the extra financing has already been spent on contracts and is waiting for the delivery. It mostly covers ammunition for various systems,” Saar assured.

“In principle, this increased the strategic sustainability of our armed services or increased various ammunition supplies by days,” Saar explained.

If the government should allocate further money for defense spending, it would require a political decision. “It is a matter of the politicians’ choice whether they will want to speed up the existing development plan or will they make specific conclusions, possible based on the current conflict,” Saar said.

Minister of Defense Laanet, however, said that the war in Ukraine could show Estonia new paths for defense spending.

“The ongoing war will definitely show which developments of capabilities have priorities and where we should contribute first of all. Once we have a clear idea, we shall be able to decide in the government and the parliament where to direct the funding. There are two sides to it: reinforcement of primary capabilities requiring rapid development. The other side is long-term development,” Laanet said.

“Defense Forces Commander Lieutenant General Herem said that more money is always needed and stressed that defense spending can have no ceiling. When asked how much money he would need and which gaps need to be filled, Herem mentioned the capabilities in the latest national defense development plan like anti-tank capability, air defense and providing armor for the second brigade.

“I am today preparing for one year. Are you giving 100 million in addition to the present funding? Short-range air defense. Give 300 million? Short-range air defense, more long-range capability and ammunition. Give 500 million? Then I shall talk about adding medium-range air defense to everything else. Give a billion? I would provide armor for the second brigade and strengthen air defense,” Herem told about how he would use the extra finances.

In other words, increasing defense spending would probably mean speeding up the national defense development plan. But Herem admitted that the development of long-range and more powerful weapons cannot be accomplished within a single year.

Waiting for the autumn

But the extra funds would not become available immediately. Sources at the Ministry of Defense told Postimees that there would be no additional budget. It is therefore likely that the possible injection of money in national defense would be discussed only in autumn when the debates of the 2023 state budget will begin.

Until that time, the possible lessons from the war in Ukraine will be studied: adjusting defense priorities according to Russia’s perceived weaknesses and strengths.

It was stated that the most critical matter or the reserve of ammunition had been handled already before the war – in January. Since the demand and prices have significantly increased by now, Estonia’s rapid action ensured the delivery of ammunition at a significantly more favorable price. “Weapons stockpiles all over Europe have been practically emptied and protection gear in East Europe has been practically sold out,” Postimees heard.

Magnus-Valdemar Saar said that the ongoing war could cause certain problems but that he did not worry about changes in the market. This means that equipment would not become unavailable overnight and prices would not double.

“The more likely outcome is that delivery of certain items could become more complicated, we need not always get exactly what we wanted or hoped for and some compromise would become necessary,” Saar said. He added that the delivery deadlines (with the exception of goods being constantly produced like ammunition) are always long, 18–24 months.

Saar admitted that impact on market prices could emerge if the war in Ukraine would drag on and countries would start increasing their defense spending just like Germany recently announced. “If there are really very many orders, it might result in the seller’s market, but at present it is the buyer’s market,” Saar said.

Minister of Public Administration Jaak Aab (Center) told Postimees that discussions are going on all the time but hasty decisions should be avoided. Is it certain that there will be no additional budget? “I cannot say. This decision has not yet been made,” Aab answered.