Baltics splurge €300mn on upgrading defence in last 6 months

By bne IntelliNews December 10, 2014

Mike Collier in Riga -


It's easy to tell when an army is flush with money: the soldiers are allowed to actually fire things instead of shouting “BANG!” as in Spike Milligan's classic tale of military idiocy, “Adolf Hitler: My Part In His Downfall”. While that might be a slight exaggeration of the plight of the Baltic military until very recently, it was not uncommon to hear jokes asking whether it was Estonia, Latvia or Lithuania who got to borrow the tank this weekend. But Estonian Defence Minister Sven Mikser's sealing of the biggest military procurement deal in his country's history on December 9​ marked a major new step in the efforts of the Baltic states to defend themselves.

The deal, worth €138mn, sees the Baltic nation of 1.3mn people buy 44 used CV90 combat vehicles and six old, but still formidable, Leopard tanks from the Netherlands. “This takes our combat abilities to another level,” Mikser said at the signing ceremony in The Hague. “Our soldiers will have greater striking power, freedom of movement and better protection.”

It comes less than a month after Mikser signed another deal, this time worth €40mn and with the US, to buy 40 Stinger missile systems for delivery in 2015. And Andres Sang, spokesman for the Estonian Defence Ministry told bne Intellinews Estonia's plans for military purchases were far from finished. “In our long-term plans there are three main objectives for procurement: new-generation anti-tank weapons, infantry fighting vehicles and self-propelled guns. The first two have been signed by today, the third order is still waiting,” he said.

Coincidentally, Estonian Prime Minister Taavi Roivas was in the US when the deal was signed, meeting with companies belonging to the Estonian Defence Industry Association about future deals. At a lecture at Stanford University on December 8, he underlined the need for “a thought-out” national defence strategy. “On one hand, we strengthen our security through a broad-scale national defence model and on the other hand, through Nato membership. Nato’s presence in the Baltic region must continue and increase,” he said. “The current security situation will stay with us for a long period of time. This is not just bad weather, this is climate change.”

Wake-up call

The Russian annexation of Crimea and its support for rebels in eastern Ukraine has acted as a wake-up call to all three Baltic states, each of which endured half a century of Soviet occupation before regaining their independence in 1991.

While Estonia has been more hawkish than Latvia or Lithuania (it retains national service and since 2012 is the only one of the three to spend the Nato-mandated minimum of 2% of GDP on defence), all three, after joining Nato and the EU in 2004, have welcomed assurances from their Nato allies that any aggression against them will be regarded as an attack on the alliance as a whole.

But in order to match deeds to the fine words Latvia and Lithuania have also started spending serious money on upgrading their own military capabilities, as well as playing host to crack foreign units on continuous “training” missions in which they don't forget to bring their own tanks.

In August the Latvian government approved plans to buy 123 CVR(T)s or Combat Vehicles Reconnaissance (Tracked) for €48mn from the UK, with the price tag rising to €70mn when they have been equipped with new Spike missile systems. Then in November another deal was agreed with Norway worth €4mn for the purchase of 800 Carl Gustav anti-tank weapons plus 100 assorted military trucks and off-road vehicles. Latvian National Armed Forces chief Raimonds Graube said the large number of anti-tank weapons was “very necessary to deal with any potential aggression.” In September Lithuania signed a €34mn deal with Poland to buy the GROM air defence system, and in October the Lithuanian defence ministry said it would spend €20mn on a fresh supply of Javelin missiles from the US, bringing the total Baltic military spend in six months to more than €300mn. “Due to the events in Ukraine, 2014 is a year when the rhetoric’s among politicians on the defence spending significantly changed,” says defence expert Kristine Rudzite-Stejskala, in a paper for the Latvian Institute for International Affairs published on December 5.

Rudzite-Stejskala points out that of Nato member states, currently only the US, UK, Greece and Estonia actually meet the 2% of GDP rule with even France spending just 1.9%. “After the Russian aggressive actions in Ukraine, both [Latvia and Lithuania] were among the first ones to react in regards of defence budget increases. Currently the Lithuanian defence budget is 0.89% and Latvia’s 0.91%. Lithuania plans to raise it up to 1.1% of GDP and Latvia not less than 1% of GDP in 2015. Compared to 2014 defence budgets, this would mean 30% and 18% increases in nominal terms, but since GDP is forecast to grow, it will likely be an even bigger increase. Estonia as a regional leader in terms of defence budget growth, also plans to raise the defence budget up to 2.05% of GDP which is a 7% increase,” she says.

Nevertheless, there is a barely-concealed sense in Estonia that the spending increases need to come even faster. “It is vital for Estonia that also Latvia and Lithuania are willing to increase their levels of defence costs to 2% of gross domestic product,” Estonian PM Roivas said at a meeting with his Latvian and Lithuanian counterparts on December 5.

And while the amounts the relatively poor Baltics can afford pale into insignificance against the estimated €60bn (3.4% of GDP) due to be spent this year by the Russian military machine – which is expected to rise by a further €20bn next year – they do show that the Baltics are no longer relying solely on the protection of their Nato allies.

Lacking combat air forces of their own, they contribute towards the costs of rotating a dozen Nato jets from various countries through the Baltic Air Policing (BAP) agreement, which sees interceptors stationed at the Siaulia base in Lithuania and Amari airstrip in Estonia.

On red alert

But even with US Abrams tanks, UK Eurofighters and crack Norwegian mechanised infantry units among the Nato forces now on permanent “training exercises” in the Baltic states, the reason for the Baltics' feeling of vulnerability is not hard to see. Russian military planes and warships are skirting Baltic airspace and sea borders on an almost daily basis. Over the weekend of December 6-7 alone, BAP scrambled multiple times to intercept clusters of Russian bombers flying close to Baltic airspace with their transponders turned off.

In response the Lithuanian military on December 8 put its military units on higher alert after a group of warships – 22 vessels – were spotted in the Baltic sea over the weekend, accompanied by military aircraft. One of the ships, the heavily-armed corvette Soobrazitelny , was tracked within 5km of Latvia's sea border.

And with Russia ramping up its own military infrastructure close to Nato’s eastern border, such as the modernization of a huge attack helicopter base at Pskov near the Estonian and Latvian borders, the militarization of the entire region is a growing possibility.


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