As of 2012 the Defence budget or the Ministry of Defence’s governing maximum amount is 2% of the gross domestic product. This supports a military national defence with a balanced and sustainable development as well as meeting NATO recommended military expenditures.
2% GDP supports a sustainable and balanced development of national defence
As of 2012 there has been an agreement between the political parties of the government to support and maintain the defence budget at a 2% GDP expenditure. Military expenditures represent approximately 4.5% of the total state budget. This is one of the smallest items in the budget. This guarantees the defence expenditure to be maintained at 2% of the gross domestic product supporting a sustainable and balanced development of national defence.
The opportunity to support military exercises and up to date equipment for individuals
Maintaining a defence expenditure of 2% GDP allows to keep personnel,- activities- and investments at an approximate equal level and within the defence budget.
Development of capabilities supports stable funding
2% GDP allows long term and constant planning of Defence Forces development.
New military capabilities, armaments and sustainable planning of Defence Forces development requires longer perspectives than a one year budget. The defence
sector must be able to have long term commitments, often several year undertakings, consequently assurance of the size of the defence budget must be agreed upon. Previous investments can become senseless if programs are suddenly ended due to a reduction in resources. The 2% GDP expenditure for national defence allows for planning on a long term basis as well as efficient use of taxpayers’ money.
Estonian defence budget 2015
The Ministry of Defence 2015 budget for their area of governing is 412 million Euros, which represents 2% of the gross national product as well as approximately 4.7% of the Estonian government’s total budget for 2015.
Simply put the defence budget is divided into personnel expenditures (25.4% in 2015) procurement and investment expenditures (38.5% in 2015) logistical and other expenditures (22% in 2015).
The defence budget is well balanced in that the three main expenditures are roughly equal in size, each representing a third of the defence budget. This way the 2015 Estonian defence budget is one of the most balanced budgets in Europe.
104 million Euros or 25.4% of the budget is spent on personnel expenses, that are meant for military active duty and civilian officials’ salaries.
76 million Euros or 18.4% of the budget goes to logistical elements that support the Defence Forces everyday activities as well as exercises – gas for vehicles, military exercise expenses, meals for military personnel, maintenance and service costs for military bases.
118.6 Euros or 28.8% of the budget goes to specialized military equipment procurements. These funds purchase new armaments and equipment for the military.
40 million Euros or 9.7% of the defence budget is allotted to investment costs
of which the lion share goes to the modernization of exercise conditions and the development of training areas.
50.7 million or 14% of the defence budget forms allocations of which the Defence League as a open-legal voluntary national defence organization as well as the pensions of retired military personnel and grants to conscripts as well as the membership fees of NATO and other international organizations.
15.3 million Euros or 3.7% of the defence budget is other expenses which includes the budget of the security agency.
Where is the most amount of money spent in the 2015 Estonian defence budget?
Defence forces clothing, individual equipment and personal defensive items (meaning uniforms, harnesses, Kevlar vests etc.) represents 12 million Euros.
A very large area of the foreseen logistical procurement funds are allotted to the issuing of equipment and equipment augmentation of the participating units of the large exercise SIIL 2015 as well as support of peacetime military exercise activities. The supplementary supply of ammunition amounts to roughly 24.4 Euros with an additional amount of 11 million Euros for the acquisition of communication equipment. The equipment of the units are supplemented with trucks and other military vehicles as well as pioneer/sapper equipment including night vision equipment and artillery fire control equipment.
The largest one time expense in 2015 is small arms ammunition procurement and the SISU XA-188 armoured vehicle purchase plan, each representing over 5 million Euros. Also of note are the procurement of navigation systems and other equipment as well as the update of radar systems for Ämari air force base. Included in munitions purchases is 4.8 million Euros for the supplement of mortar shells.Nearly 20 million Euros in 2015 is allotted to the repair and maintenance of existing light and heavy armaments, vehicles and other equipment.