Latvian President Edgars Rinkēvičs announced on 27th February that he had signed and submitted to the Presidium of the Saeima a draft law “Amendment to the Law on Financing National Defence”, proposing to enshrine in the Law on Financing National Defence a commitment that, starting from 2027, no less than 5% of the gross domestic product projected for the respective year be allocated to national defence.
In his letter to the Presidium of the Saeima, the President draws attention to the fact that the international security situation has changed significantly and irreversibly since 24 February 2022, when the Russian Federation carried out its illegal and unprovoked full-scale military invasion of Ukraine. The threat posed by Russia will persist even after the conclusion or freezing of the war in Ukraine – Russia will continue to develop its military capabilities and will pose a substantial threat to European countries and the North Atlantic Treaty Organization (NATO).
“The aim of the National Defence Financing Law is to purposefully enhance national defence capabilities through financial measures, so that Latvia, as a member of the North Atlantic Treaty Organization (NATO), fulfils its obligations within the framework of collective defence, while also providing a basis for the implementation of long-term military capability development projects and thereby supporting Latvia’s engagement in European and transatlantic security structures. Currently, the Law instructs the Cabinet of Ministers, when preparing draft laws on the state budget for the respective year and the medium-term budget framework, to provide for defence funding in 2027 and subsequent years of no less than 3 percent of the gross domestic product projected for the respective year. This statutory funding target for national defence is no longer relevant or appropriate,” said President Rinkēvičs in his letter.
“Fulfilling Latvia’s commitments to NATO, strengthening the capabilities of the National Armed Forces in line with NATO capability targets, ensuring Latvia’s provision of host nation support to Allied forces, and developing the defence industry are not possible without a purposeful increase in defence funding. It is essential for Latvia to ensure a consistent long-term increase in defence expenditure in order to implement the commitment undertaken by NATO heads of state and government at their meeting in The Hague, the Netherlands, on 25 June 2025, to invest 5% of GDP annually in defence by 2035. Based on current geopolitical developments and the need to strengthen national defence capabilities, it is necessary to ensure a predictable level of defence funding, including allocating no less than 5% of the projected gross domestic product for the respective year in 2027 and in subsequent years, thereby meeting NATO’s established criteria,” the letter states.
While being framed as strategic in nature, the intervention of the President on this matter is likely to lead to some debate as it to some extent removes the freedom of action of the elected government to set defence spending at whatever level it deems appropriate. The current projected spend on defence for 2026 is 4.9% of GDP, a level already ahead of most other NATO member states.
There is also the matter of a timeframe for the introduction of any such legislation – Saeima elections are due in October and it will be interesting to see with what degree of urgency the Saeima treats the matter – as a gesture towards voters as well as on purely practical terms.
Quite possibly, Rinkēvičs is floating the 5% level publicly so that the figure can be included at an early stage in the deliberations regarding next year’s budget, which certainly will not be passed until a new government is in place following the Saeima elections.
It will also be interesting to see whether the Saeima will attempt to include some sort of definition of what constitutes “a consistent long-term increase”, perhaps with an option of reviewing any legislation periodically.
Under the terms of Latvia’s Constitution, the President can propose legislation, but the Saeima is not obliged to enact what he or she proposes.
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