Lithuanian President Dalia Grybauskaite on Thursday urged the government to more than double its defence budget over five years amid tension following Russia's takeover of Crimea.

The Baltic nation currently spends 0.8 percent of its gross domestic product (GDP) on defence. That is well below the NATO target of two percent, in part due to huge cuts made during the global financial crisis.

"We can meet the two percent defence spending target in the next five years," Grybauskaite said in her annual address to parliament, adding that the Ukraine crisis makes clear "how fragile freedom is".

Her remarks echoed those of US President Barack Obama, who on Wednesday said he had "some concern about a diminished level of defence spending" among members of the NATO military alliance.

"The situation in Ukraine reminds us that our freedom isn't free," he said in Brussels. "We have to be willing to pay" for mutual security to ensure the maintenance of a "deterrent" force.

Lithuania's finance ministry said the government plans to raise defence spending to one percent of GDP by 2016.

Lithuania's political parties are due to sign the defence deal on Saturday, when the nation of three million people marks a decade since joining NATO.

Lithuania, where about six percent of the population is Russian, was the first Soviet republic to declare independence from the Soviet Union in 1990.