The approval of the defense budget increase by all NATO leaders is expected to force each country to spend about 5% of its gross domestic product in this regard. Albania, as a member country, will also face a recalculation of expenses in order to cope with such a decision. According to INSTAT, Albania’s economic growth until 2024 is estimated at 25.7 billion euros. While to meet NATO’s target of 2%, our country would have to spend approximately 514 million euros per year. But with the latest decision of 5%, Albania is expected to spend over 1.3 billion euros.
This figure is expected to burden the state budget, according to economic experts. Arben Malaj, former Minister of Finance, considers it unaffordable for the country’s budget to support such a decision.
“There are two options: the first, to increase by increasing the debt, and the second, to cut spending – support for education, health, social protection? There are many European countries that have high debts and are faced with the obligation to reduce their debt. How will Albania afford it?” says Malaj. A 5% increase in the defense budget would leave behind many important sectors of the economy that need support. In 2025, a budget of 2.36% of GDP has been dedicated to education, 2.78% to health, while budgetary spending on the pension scheme is 7.4% of GDP. I would continue the argument: we can have peace, but not prosperity. If the quality of education, social protection – all of which need money – is not improved, then peace is unstable, because social and political aggressiveness increases, etc.”
This decision should not have been an obligation for states, according to experts, as it violates NATO rules.
“You cannot denature NATO, which says ‘NATO will not protect those who have not paid the money’. It is not in the main documents of NATO that if you do not pay so much money, you are not protected. According to Article No. 5, every NATO country is immediately protected by the alliance. It is necessary to increase spending, but how much and will the spending increase in relation to GDP? No, because there are many EU countries, NATO members, that are in debt – the budget deficit and public debt have increased significantly.” Currently, the defense budget is 52.7 billion lek. If Albania allocates 5% of GDP to defense, then this budget, starting from the following years, will be about 2.6 times larger. According to experts, states should not prepare budgets for war, but should manage the risks of war well.
