Spend more on defence now to protect Europe from Russia, says Lithuania's defence minister

By Andrius Sytas

VILNIUS (Reuters) - Europe must remove borrowing limits for defence spending or face the prospect of war with Russia, Lithuanian Defence Minister Dovile Sakaliene told Reuters on Tuesday.

"Defence now is an existential matter, it's more important than structural reforms", said Sakaliene. "If you cannot provide enough ammo for your soldiers, it doesn't really matter what you say," she said in an interview.

"We have a chance to prevent our citizens from dying in terrifying numbers from Russian bullets and Russian bombs. But we need to disburse funds for strengthening our military, our defence capabilities, right now."

Lithuania, a NATO and EU member, which borders both its former overlord Russia and Moscow's close ally Belarus, has committed to spending 5.5% of its gross domestic product next year on defence, up from 3.9% of GDP earmarked this year.

European Union finance ministers expressed interest on Saturday in the idea of a joint defence fund that would buy and own defence equipment, partly as a way to address concerns of highly-indebted countries because the debt incurred would not be attached to national accounts.

The discussion is part of a European effort to prepare for a potential attack from Russia as EU governments realise they can no longer fully rely on the United States for their security.

Russia's defence minister said in December that Moscow had to prepare for direct conflict with NATO in the next decade.

Under the separate ReArm Europe plan, the EU is looking to boost military spending by 800 billion euros ($876 billion) over the next four years, via loosening fiscal rules on defence investment and joint borrowing for large defence projects against the EU budget.

Sakaliene said the European Union needed to remove all stops on borrowing for defence needs, and provide immediate grants, not only loans, to its members for the purpose.

She said that she could understand U.S. President Donald Trump saying he would not defend NATO allies if they were not paying enough for their own defence.

"This tension, this unpleasant conversation - it is justified... We are where we are because Europe lagged behind, terribly, for years," said Sakaliene.

Despite Trump's words, frontline NATO allies Lithuania, Estonia, Latvia and Poland "do have the United States by our side should any crisis happen", Sakaliene said, because they spend significantly on their defence and closely cooperate with the U.S. militarily.

The minister said she is hopeful NATO allies will commit to at least 4% of GDP spending goal at the Hague NATO summit in June, in the face of the Russian danger.

(Reporting by Andrius Sytas in Vilnius; Editing by Ros Russell)