Whom We'll Attack Soon: Nausėda says that in order to have a division by 2030, defense may need to be 5-5.5 percent. of GDP annually

  "Lithuanian President Gitanas Nausėda says that in order for Lithuania to have an army division in 2030, 5-5.5 percent of the gross domestic product (GDP) should be allocated to defense every year. According to him, according to the data provided by the Ministry of National Defense (KAM), about 12 billion euros are needed for the implementation of the division.

 

 "We have to answer the question, if we can't implement the national division on time at current costs, how much money do we need to get it done the way we want to in 2030?" There are different calculations, (...) we received information from the Ministry of National Defense about 12 billion. euros, but it is 10-14 billion. euros", G. Nausėda told TV3 on Monday.

 

 "Let's spread this amount over six years, until 2030, we will get, at the current level, about 1.5-2 percent point in addition. In other words, instead of 3.5 percent, 5 or 5.5 percent may be needed," he noted.

 

 According to G. Nausėda, an agreement in principle between the parties on borrowing for defense could be reached.

 

 According to him, it is possible that the deficit of the state budget, in order to significantly increase defense spending, may exceed the 3% stipulated in the Maastricht criteria limit.

 

 "I think that a principled consensus can be reached and if it is reached, then we need to clearly foresee what we have to do. I mean not only about the constitutional fiscal discipline law, but also about the need for $1.25 billion in the coming years additional funds to the money that is allocated", said the head of the country.

 

 "This can be achieved by borrowing. (...) If we increase defense spending by a significant amount, a situation may arise where the budget deficit is higher than 3 percent. (...) But by fitting in 3 percent of the GDP budget deficit, we will not defend us from the enemy," he asserted.

 

 However, the president noted that exceeding 3 percent deficit, fiscal correction should be considered in the future budget and think about growing luxury taxes, increasing progressivity.

 

 "However, in order to maintain sustainable public finances, in the years when we exceed (3% deficit - ELTA), a discussion should begin whether we will make a fiscal correction next year and, perhaps, introduce higher luxury taxes, perhaps increase progressivity, so that getting out of 3 percent the deficit would not be a long-term phenomenon that would start to increase the state debt and worsen credit ratings", said G. Nausėda.

 

 ELTA reminds that last May the State Defense Council (VGT) approved the proposal of the Ministry of National Defense (KAM) to form a division-sized military unit in Lithuania. The division, the basis of which would be the Lithuanian "Iron Wolf", "Žemaitija" and "Aukštaitija" brigades, was planned to be formed by 2030.

 

 The Minister of Finance Gintarė Skaistė presented the 2025-2027 state budget draft at the plenary session of the Seimas held in mid-October.

 

 The draft budget submitted by the government for the next year foresees that the budget income will reach 17.98 billion EUR, expenses – 23.02 billion euros. Compared to this year, budget revenues are expected to grow by 1 billion EUR (5.9%), expenses – over 2.4 billion euros (11.7%).

 

 Government sector debt in 2025 will make up 43.2 percent. (excluding the impact of the EU balance and accumulation - 42.3%), deficit - 3%.

 

 The financing of the Ministry of National Defense with the Defense Fund will exceed 2.5 billion. euros and will amount to 3.03 percent GDP.

 

 With the Maastricht criteria in force, European Union countries, including Lithuania, will have to maintain a budget deficit of less than 3% of the gross domestic product (GDP) and not have a budget deficit of more than 60% GDP-sized debts."

 

Not everyone agrees that imposing much higher taxes, even just on people we hate, is a good way to wage a war:

 

"Swedbank's Chief Economist Nerijus Mačiulis: "Rapidly raising tax rates, as shown by the example of Estonia, can not increase budget revenues, but deepen and prolong the economic recession.""

 

Whom did you people elect for us?