Viewing cable 04VILNIUS1380
Title: LITHUANIA'S 2005 DRAFT BUDGET SHORTS MOD

IdentifierCreatedReleasedClassificationOrigin
04VILNIUS13802004-11-08 12:16:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L VILNIUS 001380 
 
SIPDIS 
 
STATE FOR EUR/NB AND EUR/RPM 
DOD FOR DASD BREZINSKI 
NSC FOR VOLKER 
INR FOR INR/B 
 
E.O. 12958: DECL: 11/07/2014 
TAGS: MARR MOPS PREL MCAP PINR PGOV LH
SUBJECT: LITHUANIA'S 2005 DRAFT BUDGET SHORTS MOD 
 
REF: A. VILNIUS 889 
 
     ¶B. VILNIUS 320 
 
Classified By: POL/ECON OFFICER TREVOR BOYD 
FOR REASONS 1.4 (B) AND (D) 
 
¶1. (C) Summary.  The draft 2005 GOL budget before the 
Parliament fulfills Lithuania's NATO commitment to allocate 
two percent of GDP to defense spending, but falls far short 
of providing that two percent to the military.  The budget 
increases the share of defense money that will go to other 
Ministries for non-military defense-related expenditures. 
Military defense spending in 2005 will decrease nearly 14 
percent from 2004 levels.  The GOL downplayed the shortfall. 
While it is likely that Lithuania will be able to maintain 
the scope of its international commitments in Iraq, 
Afghanistan and Kosovo, funding levels may affect Lithuania's 
ability to meet its NATO force transformation commitments. 
We will educate new members of Parliament and Government 
about Lithuania's NATO commitments and encourage support for 
Lithuania's ongoing military transformation goals.  End 
Summary. 
 
¶2. (U) Parliament's National Security and Defense Committee 
approved on October 18 a draft budget allocating 1.86 percent 
of Lithuania's projected 2005 GDP for defense spending. 
Approximately 40 percent of this sum, however, will not go to 
the Ministry of Defense (MOD) directly, but will be 
reallocated to cover defense-related expenses of other 
Ministries, such as the Ministry of Interior and the State 
Border Protection Service.  The draft budget allocates 
roughly 750 million Litas (approximately USD 277 million) 
directly to the MOD, a decrease of approximately 120 million 
Litas (USD 44 million or 14 percent) from 2004.  In March, 
the leadership of eleven political parties signed an 
agreement committing the two percent GDP funding level for 
defense through 2008 (reftel B).  To meet the two percent 
commitment, the Ministry of Finance included the 
approximately 230 million Litas (USD 85 million) the EU 
allocated for the implementation of the Schengen visa regime 
into its defense budget calculations. 
 
¶3. (C) MOD Under Secretary for Resource Planning and Finance 
Jokubas Leleika, noting that Defense Minister Linas 
Linkevicius's had argued for additional funds, told us that 
the MOD is disappointed at what he called a "political 
decision" to divert funds to secondary defense organizations. 
 Algirdas Gricius, who sits on Parliament's National Security 
and Defense Committee, told us that the Committee was 
comfortable with the allocation since Lithuanian political 
parties, like those in many other NATO capitals, define 
"defense spending" broadly to include all Ministries working 
on defense-related matters. 
 
¶4. (C) A Lithuanian MOD defense consultant acknowledged that 
MOD's plans for military transformation presumed an annual 
one percent increase for military spending.  While he 
believes that the current budget allocations of defense funds 
for non-military line items will not affect Lithuania's short 
term (2006-2008) defense planning goals, he worried that, if 
this trend of diverting defense funds from the MOD continues, 
Lithuania's longer-term goals, including maintaining a 
NATO-capable battalion, would be at risk. 
 
¶5. (C) Comment.  The MOD had hoped to decrease the percentage 
of defense funds allocated for non-military expenditures, but 
apparently lost this battle for now.  Though the MOD assures 
us that international operations will not be affected, it is 
difficult to see how the MOD can meet its long-term NATO 
force goal commitments with these budget cuts.  We will focus 
substantial efforts on educating new members of Parliament 
and Government about Lithuania's contributions and 
commitments to NATO and encourage support for Lithuania's 
ongoing military transformation 
MULL