(L-R) Yuriko Backes, Luxembourg's Minister of Defence; Colonel Guy Hoffmann, National Armament Director, Directorate of Defence;
Credit: MAE
On Friday 16 May 2025, after briefing the relevant committees of the Chamber of Deputies (parliament), Luxembourg's Minister of Defence, Yuriko Backes, presented to the press the progress of Luxembourg's defence effort to reach 2% of gross national income (GNI) in defence spending by 2025.
As reported by the Directorate of Defence, according to current estimates, this corresponds to a defence effort of €1.18 billion in 2025.
Given the volatility of the security environment and the "clear threat" facing the EU and NATO, Minister Backes stated: "2% from 2025 onwards is an investment in our defence and our national industry."
According to the Directorate of Defence, this increase in the 2025 defence effort is also in line with the commitment made by all Allies at the NATO Summits in Vilnius in 2023 and Washington in 2024 to devote at least 2% of GDP (GNI for Luxembourg) to defence. This is a target that more than two-thirds of Allies have already achieved, and that all others have announced they will achieve by the end of the year. Minister Backes explained that at the NATO Summit in The Hague in June 2025, the 2% target will be reassessed, and that consequently, the evolution of the defence effort beyond 2025 will be the subject of a new roadmap to be developed after this Summit.
The increase in the 2025 Luxembourg defence effort is based on the following pillars:
New projects to be initiated in 2025:
- GovSat-2 government and military communications satellite: €105 million (this amount does not correspond to the total budget of the future GovSat-2 programme, which will be the subject of a financing law);
- research and development (R&D): €46 million for: national "Defence" calls for projects; European Defence Agency (cooperative financing mechanism); drone development in Luxembourg and continuation of the Skydweller solar-powered drone project;
- Defence Fund.
Military support for Ukraine:
- since 2025, Luxembourg has a specific, non-limited budget line for military support for Ukraine;
- €90 million in military support planned for 2025;
- €30 million in additional support foreseen to reach 2%;
- total support amounting to €120 million in 2025.
Accounting for expenditure of other ministries:
- identification by all ministries and government administrations of actual or planned expenditure contributing to security and defence amounting to €115 million, or 0.19% of GNI.
When selecting projects, particular emphasis was placed on economic and societal return and thus contributing to a significant strengthening of the industrial and technological base of Luxembourg's defence efforts.
The Directorate of Defence added that, thanks to significant investment in R&D and the promotion of national stakeholders at the European Union level, this "2% plan" is "clearly in line with Luxembourg's ambition to strengthen the European defence industry and, consequently, the European pillar of NATO".
