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Balkans, Romania

Romania President Blames Missed Defence Spending Target on ‘Budget Issues’

After failing to meet the 2-per-cent GDP threshold for several years, Romania has allocated a record budget for the defence sector for 2024, reaffirming its commitment to NATO.

President Klaus Iohannis named inflation, “budgetary difficulties” and the global arms crisis among reasons why Romania did not reach its defence spending target of 2.5 per cent of GDP in 2023 and spent only 1.6 per cent of GDP.

“It’s a global problem; demand is greater than the supply. Budgetary difficulties were the second factor, so liquid money did not exist. In this way, many expenses were not realised in … 2023,” Iohannis said on Thursday in Vilnius at the new Summit of the Three Seas Initiative.

NATO leaders have for years urged all members of the North Atlantic Alliance to spend at least 2 per cent of their GDP on defence. Romania has respected this decision since 2016.

However, according to an official NATO report, Romania spent only 1.6 per cent of its GDP on defence in 2023. These expenses were below the NATO average of 1.73 per cent of GDP and the minimum threshold of 2 per cent.

The NATO report also showed that Romania did not reach the mandatory target of 2 per cent of GDP for defence until 2020, when it spent 2.01 per cent of its GDP on defence.

In the last three years, the percentage has decreased from year to year, and the 1.6 per cent of GDP recorded in 2023 was the lowest percentage since 2017.

However, in 2024, the Romanian Defence Ministry has had the largest budget in the last 30 years: 19 billion euros [95 billion lei]. At least 20 per cent of this money, almost 4 billion euros [19 billion lei] should be allocated to new equipment.

In February, the Secretary General of NATO, Jens Stoltenberg, declared that 18 NATO member states would reach the target of allocating at least 2 per cent of GDP to defence in 2024. He noted that back in 2014 only three NATO states met this target.

Stoltenberg added that European NATO members would invest 380 billion dollars in defence this year.

The US has long demanded that European countries’ increase their defence spending.

In February, former US President Donald Trump raised the possibility that if he regains the presidency, the US may no longer defend NATO countries whose financial contribution is insufficient.