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Luxembourg to double defence spending by 2028

Luxembourg to double defence spending by 2028

by Yannick LAMBERT 2 min. 24.06.2022 From our online archive
The budget could reach close to €1 billion, but still falls short of the 2% of GDP Nato leaders agreed to in 2014
Luxembourg's army at a parade for national day
Luxembourg's army at a parade for national day
Photo credit: Anouk Antony

Luxembourg is set to increase its annual defence spending to 1% of the size of its economy by 2028 - or close to €1 billion - in the wake of Russia's deadly invasion of Ukraine in February.

"Given the changed security situation in Europe [...] we want to be a reliable partner", Defence Minister François Bausch told media on Friday. 

The war in Ukraine is only one example of increasing geopolitical tension around the globe, the politician from the Greens party said, showing the need for the European Union needs to take charge of defending its own borders to ensure democracy and the rule of law across its realm.

Luxembourg is planning to spend €994 million by 2028 based on current economic forecasts, nearly twice as much as €573 million next year and five times as much as in 2014, the year NATO leaders pledged to spend 2% of the size of their economies on the military. 

But even with the drastic acceleration in military spending, Luxembourg would fall well short of the NATO goal, with the budgeted expenditure reaching only 1% of Gross Domestic Product (GDP).

"Just basing it on GDP is problematic for a small country like Luxembourg", Bausch said on Friday. The Grand Duchy's per-capita spending on the military is higher than in many other countries, given the nation's wealth.

US ambassador Tom Barrett, a Democrat, urged Luxembourg to up its game and spend more on defence just after the Russian invasion in March. Luxembourg continues to rank at the bottom of the table when it comes to spending on defence, relative to the size of the economy.  

The government foresees a spending increase of up to 0.72% of GP by 2024, a goal it is now planning on surpassing.  

The country is set to continue spending money on intelligence, surveillance and reconnaissance, air transport, space technologies, and cyber defence, Bausch said. Dual-use items, which can serve both civilian and military purposes would also be a  focus, while a joint Luxembourgish-Belgian battalion, announced last year, was another priority, Bausch said. 

On 14 June, Luxembourg signed a letter of intent with Italian defence company Leonardo and Spanish company Skydweller Aero to develop "the first mission-capable, solar-powered, autonomous" drone.

Luxembourg has been reluctant to establish defence spending at a minimum of 2% of GDP, alongside Canada and Germany. Yet after the invasion of Ukraine, Germany announced it would ramp up spending to get to the target.

Luxembourg will officially announce the plan to Nato leaders, who are set to meet in Madrid on 29-30 June to take stock of progress.

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