This is how Luxembourg wants to reach the NATO goal by the end of the year

Between Luc Friedens Speech in the Chamber and the press appointment of the Ministry of Defense were only three days. However, they were enough to at least fistal Luxembourg’s previous NATO strategy. The government claims to have spent no less than exactly 1.18 billion euros in defense according to the new roadmap at the end of the current year – according to the current calculation, this is exactly two percent of gross national income (BNE).

The fact that Luxembourg has now set this ambitious goal is without doubt about the new old man in the White House. However, the effort could be described as a group compulsion: « With the exception of our country, all allies have now also announced that they will go to two percent this year, » said the responsible minister Yuriko Backes (Dp) to the press on Friday.

« It is also clear that NATO and many NATO partners expect the result of the summit to be in the Hague in June that each country reaches two percent. » In this context, Backes speaks of « considerable pressure » and the « isolation of Luxembourg », which would have left no choice to the government whether it reacts to the changed requirement attitude.

When choosing new expenditure options, your ministry rely on two premises: « We searched for projects that are not resource -intensive. That means we don’t need new people. » In addition, investments have to ensure a “return of investment”, which means that Luxembourgian companies benefit from it.

More help for Ukraine

The military budget for 2025 originally provided for an investment volume of around 800 million euros. The CSV/DP coalition of NATO was thus able to report an expenditure rate of 1.32 ENR. However, the increase by exactly 402 million euros does not mean that the full amount is to be set directly for military investments in and for Luxembourg.

Because in the total amount, the Luxembourg support services in favor of Ukraine are taken into account. These have also been recorded in an independent budget line since the beginning of the year. This means that the amount of the support is no longer subject to the economic development and can therefore be scaled more autonomously – for example, even if Ukraine will at some point be dependent on less help.

In the current year, the government has already planned 90 million euros. An additional 30 million euros are to be made available to reach the two percent target. According to the ministry, only the 90 million are credited to the 402 million euros, so that by the end of the year, only 312 million euros have to be planned or spent by the end of the year.

Other strands for this are investments in research and development (46 million euros), here with a focus on drone development in Luxembourg and the continuation of the Skydweller project, as well as expenditure of 115 million euros in other ministries, whose range of tasks also contribute to the defense and resistance of Luxembourg.

The drones are explicitly not fight drones, but these can be made available to the country attacked by Russia as part of the Ukraine Help, Backes emphasized.

Luxembourg companies should benefit

For the important satellite core project « Govsat-2 », 105 million euros are planned as part of the increase in the budget. « The first satellite is almost completely busy. That is why we see a clear need for a second satellite. In addition, it is part of the government of the government more comprehensive politics to invest more in space travel and to strengthen Luxembourg’s position in this sector, » said Backes.

In order to clear financial resources for this in the coming year, other projects whose implementation was planned for 2026 would be preferred.

« We have also set ourselves the goal of integrating the Luxembourg industry into the international defense supply chains on the one hand and acting actively to build up the industrial and technological defense base on the other hand, » said Backes, with a view to the desired « Return on Investment » character Luxembourg defense spending.

Here you work with Luxembourg’s innovation agency « Luxinnovation », which, among other things, mapped the Luxembourg company landscape, with special focus on companies that offer products with a dual-use character.

The extent to which the planning of the Ministry of Defense will survive the year is not decided in Luxembourg. In June, the NATO countries meet for their next summit in the Dutch capital. In general, it is expected that the new NATO goals will demand even more efforts from the member countries.

Incidentally, from the factual 312 million euros in addition, the regular army with headquarters on the Herrenberg in Diekirch will not see anything.