Estonia supercharges Defense spending commits 5.4% of GDP to military growth
In a decisive move to bolster national defense, Estonia has approved an unprecedented $3.2 billion spike in military spending, locking in a long-term commitment to allocate an average of 5.4 percent of its GDP toward defense through 2029. This new investment marks the largest increase in Estonia’s defense budget in its modern history and signals the country’s determination to meet evolving NATO capability targets.
Announced on Thursday, the “supplementary defence investment programme” outlines Tallinn’s ambitious roadmap for strengthening its army, air force, and navy. Prime Minister Kristen Michal hailed the decision as a major step forward, emphasizing that the increased funding will accelerate critical developments, including enhanced air defenses, expanded artillery capabilities, the creation of a deep-warfare capability, and substantial investments in drone and electronic warfare systems.
“Our defense forces must be ready for the challenges of today and tomorrow,” Michal said. “This funding ensures we can build a stronger, more capable Estonia.”
Estonia’s strategic upgrades are heavily informed by lessons from the ongoing war in Ukraine and the shifting defense landscape within NATO. Maj. Gen. Andrus Merilo, commander of Estonia’s Defence Forces, is set to guide the nation’s modernization efforts, ensuring alignment with NATO’s latest readiness and interoperability goals. Although NATO’s updated capability targets remain classified, alliance leaders, including Supreme Allied Commander Transformation Pierre Vandier, have indicated that nations are expected to increase their individual targets by roughly 30 percent.
Estonia is not acting alone. Lithuania and Latvia, Estonia’s Baltic neighbors, have similarly ramped up their defense budgets, pledging between 5 and 6 percent of their GDP toward military spending. This regional surge reflects broader European efforts to answer long-standing calls, including from the Trump administration, for greater defense commitments among NATO members.
Key procurements underpinning Estonia’s modernization push are already underway. Tallinn has invested over $200 million in acquiring six Lockheed Martin M142 High Mobility Artillery Rocket Systems (HIMARS), and a second batch is under consideration. However, procurement decisions are being carefully weighed due to concerns about delivery times and costs, prompting evaluations of alternative systems.
Beyond HIMARS, Estonia is refreshing its ground forces with nearly 50 Turkish-made Arma 6×6 and NMS 4×4 armored vehicles. These vehicles will bolster infantry and combat support units, while the artillery arm has been strengthened with the arrival of French-produced Caesar MK1 155mm self-propelled howitzers earlier this year.
Air defense and precision strike capabilities are also taking center stage. The Estonian Centre for Defence Investments (ECDI) initiated a tender process for loitering munitions in late 2024, seeking to establish a robust seven-year framework agreement with multiple suppliers. Meanwhile, critical ammunition stockpiling forms a cornerstone of the 2025–2029 investment plan, with €800 million allocated for large-caliber ammunition and €300 million for small-caliber rounds by 2028.
As Estonia aggressively upgrades its military capabilities, the small Baltic nation is sending a clear message: it is determined to defend itself and uphold its obligations within NATO. With a sharp eye on regional security dynamics and a commitment to cutting-edge defense technologies, Estonia is positioning itself as a steadfast and resilient player on Europe's eastern frontier.
