Luxembourg is set to significantly boost its defence budget from €700 million to 2% of its Gross National Income (GNI), as confirmed by Minister of Defence Yuriko Backes in a strategic move to enhance the Grand Duchy's role within NATO.

Luxembourg's current defence budget stands at €700 million, equivalent to 1.3% of its Gross National Income (GNI). However, this figure is set to increase to 2% in the medium term. This ambitious goal was confirmed by Minister of Defence Yuriko Backes during her meeting with NATO Secretary General Jens Stoltenberg in Brussels on Tuesday. A proposal detailing the gradual increase in defence spending will be presented to the Government Council.

Minister Backes emphasised that Luxembourg aims to shed its image as a "profiteer" within NATO and become more actively involved in the military alliance. She plans to formalise this commitment at the upcoming NATO summit in Washington next month, as well as at the ministerial meeting in Brussels next week.

In 2024, Luxembourg is contributing €70 million to aid Ukraine in the war against Russia. According to the Ministry of Defence, this amount represents the "strict minimum" and may be increased based on Ukraine's needs.

Historically, Luxembourg has ranked last among NATO members in defence contributions relative to GDP, except for Iceland. Since the Vilnius meeting in summer 2023, Luxembourg has been allowed to calculate its contributions based on GNI, which is lower than GDP.