LITHUANIA'S DEFENSE BUDGET FALLS SHORT OF

UNCLAS VILNIUS 001291

SIPDIS

SENSITIVE

STATE FOR EUR/NB

E.O. 12958: N/A
TAGS: PGOV PINS LH
SUBJECT: LITHUANIA'S DEFENSE BUDGET FALLS SHORT OF
EXPECTATIONS

REF: VILNIUS 1277


1. (U) Lithuania's parliament approved a defense budget for
2006 on December 8 that falls short of the Lithuanian armed
forces' hopes -- and of the GOL's commitment to NATO.
Despite an 11 percent increase in absolute terms over last
year's appropriation, defense spending will remain at 1.27
percent of GDP, roughly the same as 2005. The MOD and
several influential parliamentarians favored increasing
defense spending by 0.05 percent of GDP (reftel),but the GOL
declined to ask the legislature for such an increase.


2. (U) The approved budget includes USD 6.2 million for the
first of three payments for a new radar system to improve
coverage of Lithuania's airspace, which was a high MOD
priority. As anticipated reftel, parliament did not sign off
on the MOD's request for authorization to seek a loan for the
purchase of three military transport aircraft to meet a NATO
force goal.


3. (SBU) The outcome on the overall military budget took many
in parliament by surprise, as the leadership of all the key
committees with particular interest in the defense budget had
favored the 0.05 percent of GDP increase. They and other key
parliamentarians had told us they expected the Seimas to
approve the increase. The Ambassador and Defense Minister
Kirklias coordinated contacts with key parliamentary leaders
to ensure that Lithuania progressed towards its NATO
commitment to spend two percent of GDP on defense.
High-ranking MOD officials told us that the stage was set for
a 0.05 percent of GDP increase in military spending as
recently as November 30.


4. (U) In the end, the beleaguered, multiparty government
chose butter over guns. Following passage of the budget,
parliamentary sources told us that the final allocation was
the result of backroom coalition politicking in which the
military's advocates failed to carry the day. MOD
Undersecretary Renatas Norkus told us there is still a
possibility that parliament will consider supplemental
funding to fill some of the gaps that this budget leaves.


5. (SBU) Comment: As reported reftel, even the hoped-for
0.05 percent of GDP increase would have left Lithuania short
of the resources it needs to meet all of its NATO commitments
and to advance its military transformation agenda. This
budget only exacerbates that problem. In the coming days, we
will continue to discuss with the MOD what deadlines or goals
this funding shortfall will jeopardize and how we can engage
with parliament and the GOL to help the MOD obtain the funds
it needs.
MULL