Norway to reach target of 3.5% of GDP on defence with new spending boost

By Gwladys Fouche

OSLO, March 27 (Reuters) - Norway is to raise defence spending by another 115 billion crowns ($12 billion) by 2036, the government said on Friday, as it also delayed committing to long-range defence systems while it learns lessons from the Ukraine war.

The spending comes on top of Norway's previously announced plan to spend 1.62 trillion crowns ($167 billion) on defence between 2025 and 2036.

Norway, like other NATO members, is increasing defence spending as a result of the war and under pressure from U.S. President Donald Trump. The extra spending will take Norway to its NATO commitment of 3.5% of GDP in 2035, the government said.

"We are ... allocating a significant increase in resources to the long-term plan, while also carefully weighing the priorities needed to rapidly strengthen Norway's defence capabilities," Prime Minister Jonas Gahr Stoere told a press conference.

Norway is NATO's monitor for the vast 2 million square km (772,000 square miles) area of the North Atlantic used by the Russian northern fleet's nuclear submarines.

It is the only country in Europe that does not need to borrow money to finance increased defence spending, thanks to its $2 trillion sovereign wealth fund, the world's largest.

It is also one of few countries where there was a consensus across the board when the long-term defence plan was first presented, with all parties in parliament backing it in 2024.

Support for Ukraine would come in addition to the 3.5% of GDP spending, the government said.

VAST PROCUREMENT PROGRAMME

Oslo has committed to buy six submarines from Germany's TKMS TKMS.DE and at least five frigates from Britain's BAE Systems BAES.L as well as long-range rockets and artillery systems from South Korea's Hanwha Aerospace 012450.KS.

The first of the six submarines will be delivered in 2029 while the first two frigates are expected to arrive in 2030 and 2032, respectively, Stoere said on Friday.

Norway will also prioritise short-range air defence and defence against drones, as a result of lessons learned in the Ukraine war.

Among elements being delayed are long-range maritime surveillance drones as well as long-range anti-ballistic air defences.

Stoere said more work was needed to reach the right decision, given the experience from Ukraine, where current air defence systems struggle with countering this type of Russian missile.

"We need to see how we can answer that best," he said.

Defence Minister Tore Sandvik said it was important to have a coordinated Nordic effort to buy similar systems, which is not the case at present.

For the drones, the delay is due to prohibitive costs, but also because new technology is developing fast and new solutions may be more relevant, Norway's chief of defence Eirik Kristoffersen said.

($1 = 9.6840 Norwegian crowns)