National Coalition Party leader Petteri Orpo speaks to the media during the party council’s spring meeting in Helsinki on 7 June 2025. Photo: Mikko Stig / Str / Lehtikuva
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Finland plans to raise its defence spending to five percent of gross domestic product by 2032, Prime Minister Petteri Orpo said on Saturday at the National Coalition Party’s spring council meeting.
The country is already committed to increasing defence expenditure to 3.5 percent of GDP, following a proposal by NATO’s defence minister Mark Rutte. The new target exceeds both NATO’s two percent baseline and Rutte’s proposal, aligning more closely with demands made by US President Donald Trump, who has repeatedly urged allies to raise military budgets to five percent.
“There have been internal discussions about the timeline, and we are looking at 2032,” Orpo said during his address. He confirmed the government’s earlier decision made in April to increase military spending to three percent of GDP by 2029.
Raising defence spending to three percent would require an estimated additional €10 billion annually by the end of the decade. Increasing it to five percent would demand further funds, placing pressure on the long-term sustainability of Finland’s public finances.
Orpo declined to specify how the increased defence spending would be financed, but ruled out tax hikes. “I don’t want to start with raising taxes. Our debt is already at a critical level,” he said.
According to Orpo, the added military, interest and social costs will be covered through economic growth. The prime minister did not commit to any further austerity measures or borrowing to fund the proposed defence increases.
Orpo said he remained confident in the government’s fiscal direction. “Recently I’ve been criticised for being too optimistic about the economy. That’s a criticism I’m happy to accept. I believe firmly that our decisions are the right ones,” he told the party council in Helsinki’s Little Parliament building.
He emphasised that the government’s economic policies had not yet taken full effect. “Talks of failure are premature,” Orpo added.
The prime minister defended the government’s €10 billion fiscal adjustment package, arguing that without it, Finland’s annual borrowing would be €4 billion higher. He warned that debt levels would otherwise rise to 90 percent of GDP next year and surpass 100 percent before the end of the decade.
Economic issues were closely linked to security policy in Orpo’s speech, where he reiterated Finland’s ongoing commitment to support Ukraine.
“We will not let Russia win,” he said.
HT
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Source: www.helsinkitimes.fi
