The Baltic countries —Estonia, Latvia, and Lithuania— have signed an agreement to increase their defense spending to 5% of their Gross Domestic Product (GDP) starting in 2026.
This commitment, formalized at the Amari Air Base in Estonia on May 23, 2025, responds both to growing geopolitical tensions with Russia and to demands from U.S. President Donald Trump for NATO allies to increase their military investments.
The decision by the Baltic countries stems from Russia’s invasion of Ukraine in 2022. Estonia, Latvia, and Lithuania have intensified their efforts to strengthen their defense capabilities.
Their geographic proximity to Russia and their history as former Soviet republics make them a critical NATO flank. According to Estonian Defense Minister Hanno Pevkur, the current security situation demands a significant increase in military spending— a stance supported by the leaders of the three countries during the Amari meeting.
In recent years, the Baltics have observed a rise in Russian activities, including airspace incursions, military exercises near their borders, and hybrid operations such as cyberattacks and disinformation campaigns.
In 2024, Lithuanian President Gitanas Nausėda warned about the rise in “Russian sabotage on NATO territories,” highlighting the need for a coordinated response. This context has led the Baltics to prioritize deterrence, with investments in advanced systems like HIMARS rockets and air defense systems.
The Amari agreement also reflects pressure from the United States, NATO’s leading power, for its allies to reach a 5% of GDP military spending level.
This demand, driven by the Trump administration, has sparked debate within the Alliance, as NATO’s current threshold is 2% of GDP— a level many countries have yet to meet.
The Baltics, however, already far exceed this minimum. In 2022, Lithuania allocated 2.47%, Estonia 2.12%, and Latvia 2.07% of their GDP to defense, according to NATO data. In 2024, Estonia announced plans to reach 3.7% by 2026, while Lithuania aims for a 5% to 6% range between 2026 and 2030. Latvia, for its part, decided in May 2025 to raise its spending to 5%, reallocating resources and optimizing government efficiency.
Raising defense spending to 5% of GDP implies a significant financial effort. In Latvia, Prime Minister Evika Siliņa noted that budget cuts, new revenue sources, and possibly a higher deficit will be required.
Estonia, according to its Prime Minister Kristen Michal, plans to fund the increase without new taxes, using EU funds, cuts in the public sector, and strategic borrowing. Lithuania, which has already committed 0.25% of its GDP to military support for Ukraine, seeks to balance its defense ambitions with economic stability.
These investments are not focused solely on traditional weaponry. The Baltics are strengthening their capabilities in cybersecurity, electronic defense, and military mobility.
For example, Latvia will allocate 42% of its 2025 defense budget to developing military capabilities, including HIMARS systems and air defenses.
In addition, the three countries are advancing the synchronization of their power grids with continental Europe, a project to be completed by February 2025 to reduce energy dependence on Russia.
While the Baltics lead with their 5% commitment, NATO shows a clear divide. Countries like Poland— which will allocate 4.12% of its GDP in 2025— and Lithuania, with plans to reach 6%, contrast with nations like Spain, which barely reaches 1.09%.
Countries closer to Russia prioritize traditional defense, while others, such as Spain, focus their efforts on cybersecurity and disaster prevention.
The Amari meeting also served to prepare for the NATO summit in The Hague in June 2025, where defense spending will be a central issue. The Baltics will advocate for a widespread increase in military budgets, supporting previous proposals like Poland’s to raise NATO’s minimum to 3%.
A question arises: Is it sustainable for small economies like Estonia, Latvia, and Lithuania to assume such high military spending? The reallocation of resources and borrowing could jeopardize essential services like healthcare, education, or pensions, affecting their citizens.
The Baltic strategy highlights the need for a more coordinated European approach, where the burden of defense does not fall disproportionately on the smallest and most vulnerable nations.
It is true that today’s threats are increasingly complex— from cyberattacks to disinformation— but NATO’s real strength will depend not only on how much is spent, but on how investments are made and how security priorities are balanced with social needs.
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