Lithuanian FinMin defends deficit budget: pressure to cut defence spending

Lithuanian Finance Minister Taurimas Valys defended the government's 2026 budget proposal, which includes a sizable deficit, in an interview with the public broadcaster's portal LRT.lt. He said that while the next year's spending bill was being prepared, there was considerable pressure to sharply cut defence spending, including from coalition partners.

Pressure to cut spending

The minister said there had been many temptations to make drastic cuts or to use certain tricks that might have been ill-considered and not coordinated with Lithuania's defence partners. Some proposals suggested looking at other NATO countries and tying spending to the minimum required by the main ally, the United States. According to Valys, the government stood firm. The opposition also applied considerable pressure.

Benefits of the decision

Lithuania has committed to keeping defence spending above 5% of gross domestic product (GDP). In the minister's view, this is already paying off: expectations were created among partners, and by setting an example the country is seeing certain dividends. He said Lithuania is no longer treated as a war zone but is seen as resilient and determined, investing in defence and able to attract the attention of the world's biggest market players.

Pensions question

Valys also addressed next year's pension increases. He said they could potentially be financed from the surplus in the reserve of the State Social Insurance Fund (Sodra), rather than by drawing on the reserve itself. He added that the question remains open.