NATO Defense Expenditures Rising But More Needed
On Tuesday, Secretary of State Mike Pompeo affirmed that the U.S. “stands shoulder to shoulder” with its North Atlantic Treaty Organization (NATO) allies. The show of solidarity follows President Donald Trump tweeting a graph showing the defense expenditures of NATO allies. He called the failure of many allies to spend two percent of GDP on their defense “very unfair to the United States!” A NATO communiqué released in June shows several years of progress and continued problems. Failure to address those problems or consolidate recent gains could impact the alliance’s ability to effectively deter aggression by Moscow.
NATO members have long pledged to come to their mutual defense, a principle enshrined in Article 5 of the organization’s founding treaty. Decades later, at the 2014 Wales Summit, members pledged to spend two percent of gross domestic product (GDP) on defense by 2024.
Halfway to that deadline, nations have made notable efforts in the right direction. According to a June communiqué, NATO member countries expect to spend $1.04 trillion on total defense. That represents the largest year-to-year increase since 2012, and the first time the allies have passed the $1 trillion mark.
NATO members today spend a greater percentage of GDP – now a median of 1.63 percent – than they did in 2015. Seven members have reached 2024 targets, several more expect to do so next year, and the five largest spenders all expect to spend more in real dollars than last year. Small countries are stepping up, too. For example, Slovakia’s new president pledged to reach 2 percent spending by 2022.
In keeping with NATO’s efforts to maintain a forward presence to its east, countries have invested heavily in defensive capabilities, including infrastructure to support those capabilities. As of last year, as part of a Readiness Initiative, NATO has four multinational battlegroups in the Baltic States and Poland, and its Response Force was tripled to over 40,000 troops.
Germany’s new defense minister, Annegret Kramp-Karrenbauer, recently confirmed that NATO remains “the cornerstone” of German security architecture. And former Commander of U.S. European Command Gen. Curtis M. Scaparrotti noted that Berlin is working to address readiness concerns.
Germany and a majority of the other members have not reached their shared 2014 target. Of the five top spenders, only the U.S. and U.K. are meeting their 2 percent commitments, though France expects to reach its target by 2024. Canada has “no plans” to do so. Germany has called it neither “reachable nor desirable.” In fact, Chancellor Angela Merkel declared recently that Germany would aim only “to achieve 1.5 percent by 2024.”
As U.S. Ambassador to Germany Richard Grenell noted, the size of the economies missing their targets matters. France, Canada, and Germany’s respective 1.84, 1.27, and 1.36 percent spending rates leave them $40 billion short of their commitments – the equivalent of three Gerald R. Ford-class nuclear-powered aircraft carriers. Referring to Germany, Grenell noted, “Multiple presidents have asked the largest economy in Europe to pay for their own defense.”
There is also the problem of misallocated defense dollars. Almost half of members spend more than 80 percent of their defense dollars on things other than equipment expenditures, the hardware needed to fight wars. For many countries, pensions are eating away at military budgets. Belgium, for example, spends 40 percent of its defense dollars on pensions.
Successful deterrence requires Moscow to believe that NATO has both the military capability and political will to respond to aggression. A failure to honor defense spending commitments undermines both. The U.S. should thus continue urging allies to meet their defense spending obligations while making clear it will uphold the alliance's collective defense. Any other policy risks inviting the very aggression NATO was created to prevent.
Major Amoreena York is an active duty U.S. Army officer and Visiting Military Fellow at the Foundation for Defense of Democracies (FDD). Mikhael Smits is a research analyst at FDD’s Center on Military and Political Power. The views expressed are the authors’ and do not necessarily represent those of the U.S. Army or the Department of Defense.