The increase in defense spending in Eastern Europe is further accelerating efforts by countries like Lithuania to strengthen their defense capabilities. While the Baltic countries have significantly increased their defense budgets following Russia’s invasion of Ukraine, Lithuania is also taking steps to develop its military industry and attract more investors. An important part of these efforts is accelerating purchases of strategic equipment such as tanks and infantry fighting vehicles and increasing defense industry investment.
Increase in Defense Expenditures and Strategic Goals
Lithuania aims to increase its defense spending to 2026% to 2030% of the country’s gross domestic product (GDP) between 5 and 6. This goal would put Lithuania at the top of NATO’s defense spending. The chairman of Lithuania’s National Security and Defense Committee, Giedrimas Jeglinskas, emphasized the importance of this strategy, saying, “We need to reach a level where we can deter potential aggression,” and stressed how critical it is for the country to have a strong defense capacity. To achieve this goal, Lithuania is rapidly increasing its military spending, focusing on acquiring high-tech assets such as tanks, infantry fighting vehicles, and air defense systems.
Tank and Infantry Fighting Vehicles Purchases
During the official visit of Lithuanian Defense Minister Dovilė Šakalienė to Germany in 2024, a contract for the purchase of 44 Leopard 2A8 tanks was signed. This purchase aims to increase Lithuania’s defense power on NATO’s eastern flank. It was also announced that Germany’s Bundeswehr will deploy a 2025-strong heavy maneuver brigade to Lithuania in the summer of 4.800. Another important step in increasing Lithuania’s defense capacity was the approval for the purchase of CV90 infantry fighting vehicles. Manufactured by BAE Systems Hägglunds, these vehicles will be a key element of Lithuania’s newly-formed infantry division.
Defense Industry Investments and Foreign Investors
Lithuania is not only limiting its investments in the defense sector to military equipment; it is also taking important steps to attract foreign investors for the defense industry. Major defense industry players such as Rheinmetall have taken steps to establish new production facilities in Lithuania. Rheinmetall has begun construction of a factory to produce 2024 mm artillery ammunition in the Baisogala region of Lithuania by the end of 155. The company plans to put this facility into operation in 2026 and aims to create approximately 180 new jobs by investing 150 million euros. Rheinmetall sees this project as part of its efforts to strengthen Lithuania’s defense industry and attract more defense industry investors to the country.
The Lithuanian government is supporting domestic and foreign investors to encourage more investments in the defense industry through a project called the Green Corridor. The government plans to advance Lithuania’s strategically important investments in the defense sector by offering financial support to potential investors.
Regional Defense Cooperation and Estonia's Initiative
Lithuania is also strengthening regional defense cooperation. Following Estonia’s defense industrial park model, it aims to attract defense manufacturers to more residential areas on its territory. Estonia has a defense industrial park at the Ämari military base, and Lithuania plans to undertake a similar initiative, offering defense companies suitable space for production. These steps will contribute significantly to Lithuania’s efforts to strengthen regional security.
Lithuania’s efforts to increase defense spending and encourage defense industry investments are of great importance for both national security and economic development. Lithuania, which wants to strengthen its strategic position on NATO’s eastern flank, aims to increase its defense capacity with technological equipment and international cooperation. The investment of major defense companies such as Rheinmetall in the country is the first step towards Lithuania becoming a major defense industry center. In addition to strengthening Lithuania’s defense power, these investments will also contribute to regional security and lead to an increase in the defense capacity of Eastern Europe.
