Montenegro plans to allocate three percent of its GDP for defense spending

Dragan Krapović's department expresses confidence that the government, with the crucial involvement of the Ministry of Finance, will recognize the significance of increasing the defense budget, in line with the decisions made at the Summit in The Hague.

According to unofficial information from the executive branch, Montenegro's government is expected to raise defense spending to three percent of its gross domestic product (GDP) next year, up from the current two percent.

This increase could represent at least 200 million euros, based on the latest figures from the Statistical Office - Monstat—which indicate that the country's GDP for 2023 is just under seven billion euros (6.96 billion). The government's Macroeconomic and Fiscal Policy Guidelines for 2024-2027 project the GDP for 2026 to be approximately 8.2 billion euros, suggesting that defense spending could reach around 246 million euros.

Last year, Montenegro allocated approximately 150 million euros to its defense system, symbolically surpassing the NATO guideline of spending at least two percent of GDP on defense. In response to an inquiry from "Vijesti" regarding the potential increase of defense spending to three percent of GDP, the Ministry of Defense stated that the proposal for the 2026 budget is still in development. This will provide an opportunity for more accurate projections regarding defense expenditures.

"Furthermore, during the summit in The Hague this June, NATO member state leaders are expected to adopt a new defense spending plan that will significantly raise the current benchmark of 'a minimum of two percent of GDP.' In this context, we want to highlight that the Ministry of Defense will consistently focus on implementing the demanding NATO agenda, with increased defense spending as the top priority, essential for meeting all other objectives," stated the department led by Dragan Krapović (Democrats). They acknowledge that this criterion will serve as a key measure of each member state's credibility within the Alliance.

"The Ministry stated, 'In light of the above and our firm commitment to foreign policy, we believe that the Government of Montenegro, with the essential involvement of the Ministry of Finance, will recognize the significance of increasing the defense budget while preparing the overall state budget for the upcoming year, in line with the decision to be made at the Summit in The Hague.'

Last year, 30.41 percent of the budget was allocated for defense, and they anticipate that this year, that figure will be approximately 34 percent, with the majority directed towards achieving NATO capability goals assigned to Montenegro.

At the beginning of the year, shortly after his election, U.S. President Donald Trump stated that NATO member countries should allocate five percent of their GDP to defense, significantly higher than the current target of two percent, which no member currently meets."

According to media reports from that time, officials from NATO countries acknowledged the need for increased defense spending but did not endorse the proposed five percent target, which analysts deem politically and economically unfeasible for nearly all member states. It is anticipated that a new target will be established at the NATO summit in June in The Hague, particularly in light of concerns that Russia may launch an attack on a NATO member following its aggressive actions in Ukraine.

In early May, Reuters reported that NATO Secretary General Mark Rutte suggested that member countries raise defense spending to 3.5 percent of GDP, with an additional 1.5 percent allocated for broader security-related expenditures to satisfy President Trump's demands. Officials indicated that this broader spending could encompass investments in upgrading infrastructure, such as roads and bridges, to facilitate the movement of heavy military vehicles.

In February, following the NATO ministerial meeting in Brussels, Defense Minister Krapović announced that Montenegro is prepared to increase its defense budget in line with the new spending plan.

In mid-May, he acknowledged that while Montenegro may not rank among the highest spenders in absolute terms, it has met a crucial requirement of the Alliance: allocating over 20 percent of the total defense budget to modernization. "Montenegro surpassed that threshold long ago, reaching 30 percent last year and even more this year. I would like to highlight that last year, the Ministry of Defense initiated the largest modernization project since the establishment of the Army of Montenegro (AVCG) with the purchase of two patrol ships. Perhaps even more significant is that we have established trust," Krapović stated.

He stated that the current contributions from NATO allies are inadequate and that emerging challenges and geostrategic changes necessitate a new approach. He emphasized that the Ministry of Defense is fully committed to executing both the current and capital budgets for defense requirements. In the 2025 budget, the government intends to borrow 75 million euros to acquire equipment and resources for the Armed Forces of Montenegro, aiming to fulfill the capability goals established by NATO, which Montenegro has been a member of since 2017.

In March, Ursula von der Leyen, President of the European Commission, unveiled a five-step plan aimed at rearming Europe, with a budget exceeding €800 billion. All 27 EU member states reached a consensus on a list of priorities for enhancing defense capabilities at the EU level. These priorities include air and missile defense, artillery systems, missiles and ammunition, drones and anti-drone systems, strategic capabilities, military mobility, cybersecurity, artificial intelligence, and electronic warfare.

The Ministry of Defense informed "Vijesti" that, as in previous years, the defense budget will be allocated to personnel costs, ongoing expenses, and, most importantly, the modernization of the army.

"They emphasized that Montenegro has consistently allocated a much larger portion of its defense budget for modernization and equipment over the past several years than what NATO criteria require."