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Netherlands boosts defence spending

The Netherlands Finance Ministry released the country's 2022 budget on 21 September, allocating EUR12.4 billion (USD14.26 billion) to defence. This represents a 6.56% nominal increase and a 5.4% real increase over last year's draft budget. However, the 2021 budget was supplemented by about EUR450 million, with additional funds allocated mainly to wages (EUR121 million) and price adjustments (EUR104 million). As such, the 2022 budget is only 2.7% higher in nominal terms than last year's, while also remaining relatively stable at 1.43% of GDP.

According to official projections released at the same time, the 2022 budget will represent a high, at least in the short term. Defence is set for consecutive cuts in 2023–26, averaging 1.4% a year in nominal terms and 2.6% in real terms. This means that the 2026 budget will be 10% smaller in real USD than the 2022 one.

This is due largely to a fall in investment. Since 2021, Article 6 Investeringen krijgsmacht (Armed Forces Investment) of the defence budget was replaced by new Article 13 Bijdrage aan Defensiematerieelbegrotingsfonds (Contributions to the Defence Equipment Budget Fund). This is set to fall from EUR4.95 billion in 2022 to EUR4.4 billion in 2026 and EUR4.3 billion in 2030. Allocations from the Defence Material Organisation (DMO) are kept stable at EUR600 million.

However, this is still significantly higher than pre-2019 figures. Investment in 2017, which included the Armed Forces Investment fund and allocations from the DMO, came to EUR2.5 billion and increased slightly to EUR2.86 billion in 2018. It then jumped to EUR3.77 billion in 2019 and EUR3.88 billion in 2020, before exceeding EUR5.1 billion in 2021.

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