Norway boosts defense spending by whopping $48 billion

Russia’s invasion of Ukraine has shifted Norway’s discussion on military spending
Norway will dip into its huge rainy day sovereign wealth fund to deliver a “historic” defence spending boost of $48 billion over the next 12 years to face down Russian aggression.

Overall military spending until 2036 is expected to total $125 billion, Norway said on Friday. The country borders Russia in the Arctic and is a member of Nato.

It comes as Nato allies have ramped up defence spending but remain divided over funding to Ukraine, with a major spending package blocked by the US Congress.

The alliance is also facing pressure to meet Nato demands over minimum domestic defence budgets, with Donald Trump threatening to abandon members who do not pay their fair share if he is re-elected.

The Norwegian government said ‘we will live with a more dangerous Russia for many years’
The Norwegian government said ‘we will live with a more dangerous Russia for many years’ CREDIT: Dino Fracchia/Alamy Stock Photo
Norway’s planned annual defence spending in 2036 will, on a comparable inflation-adjusted basis, be about 83 per cent higher than the current level, according to Oslo.

The invasion of Ukraine has shifted Norway’s discussion on military spending, despite the Nordic nation never having been at war with Russia.

“This plan represents a historic boost in defence spending, and involves a significant strengthening of all branches of the armed forces,” Jonas Gahr Stoere, the prime minister, said.

Norway’s sovereign wealth is the world’s largest and has assets of $1.30 trillion.

This meant it could fund the military spending without slashing cash for hospitals or schools, Mr Stoere said.

Annual government spending from the wealth fund will remain restricted as before to 3 per cent of the overall assets.

“We must expect that Norway will live with a more dangerous and unpredictable Russia for many years,” the government told parliament on Friday.

“The relationship with Russia will for a long time to come be demanding, and in many ways defining, for Norwegian security and defence policy,” it added in a paper.

The Nordic country can fund military spending without slashing cash for hospitals or schools

Norway recently announced plans to ramp up defence spending in 2024 to 2 per cent of its gross domestic product, meeting a Nato target.

Oslo had previously said it would meet the 2 per cent target only by 2026. It spent 1.57 per cent of its GDP on defence in 2022, according to Nato.

Some alliance members have increased their defence spending to deter Russia and to replace weapons sent to Ukraine. Germany announced a $95 billion fund to modernise its army in 2022.

Mr Trump has been critical of Nato members not hitting the spending target.

In February, he said he would encourage Russia to do “whatever the hell they want” to any Nato country not paying enough.

On Friday, Lithuania said that it would supply Ukraine with about 3,000 combat drones, which have become key in its fight against Russia’s invasion, and also help set up three recovery centres for Ukrainian soldiers.

“In the near future, Lithuania will buy around 3,000 Lithuanian-made FPV [first-person view] drones for Ukraine, for two million euros,” Ingrida Simonyte, the prime minister, said at a press conference with Denys Shmyal, her Ukrainian counterpart.

Deliveries of the FPV drones could begin this year, Ms Simonyte said.

Lithuania has supplied more than €1 billion of aid since Moscow launched its assault in February 2022, representing 1.54 per cent of its annual GDP according to a Kiel Institute analysis – one of the highest percentages among Kyiv’s allies.

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