Estonian PM: When increasing defense spending, money should also come from EU

Prime Minister Kristen Michal. Photo: Martin Pedaja

When it comes to raising Estonia's defense spending to 5 percent of the gross domestic product (GDP), money collected from taxes in Estonia is not enough and help should also come from the European Union, Prime Minister Kristen Michal said on Thursday.

Speaking at the government's press conference, Michal said that a European Council meeting with a focus on defense issues is coming up in February.

«After that, the debates in Europe will continue, and around Midsummer's Day there will be a NATO summit in The Hague, where NATO's various goals will be discussed,» the prime minister added.

«I do not consider it possible to use tax increases as a source of funding for the increase in defense spending given today's economy and people's livelihoods. Rather, this source of funding should be core funding from the European Union. Similarly to various large programs concerning infrastructure, critical connections and other undertakings that the EU considers important,» Michal said.

With Estonia, Latvia, Lithuania and Poland covering the eastern flank and working hard to ensure that security is also guaranteed for the allies, then it would probably be appropriate for Europe to contribute to covering this flank as well, he added.

According to the prime minister, another source of funding would be continued cuts in the public sector.

«In my opinion, things can still be made thinner in the country, and the state doesn't have to operate everywhere, there are places where the private sector can also operate. So I think we have room for cuts, and we will continue this debate,» Michal said.

Michal highlighted loans as a third source of funding, provided that fiscal policy rules can be changed.

«So that the loan can cover defense spending without us having to debate with the EU about an excessive budget deficit,» he added.