Love Him or Hate Him, Trump Is Right When It Comes to NATO Spending
The vast majority of NATO members are not meeting their fiscal obligations, and it is time for that to change.
Trump on NATO, what a tangled web he wove. During his campaign he questioned the alliance's relevancy, then said it needed to be revamped to fight terrorism, and all while slamming NATO member countries for not paying "their fair share." These statements rocked the alliance—one that is more important now than it has been for over 25 years. But just because NATO is strategically imperative, doesn't mean some member countries, especially the comparatively wealthy ones, should be able to put whatever price tag they want on their inclusion in the alliance.
In recent years, the goal has been to get NATO alliance members to spend 2% of their gross domestic product (GDP) on defense. This standard may not be a perfect way of measuring each country's contribution, but it does provide a baseline to go off of, and whichever way you view it, some countries clearly need to invest more money into their war-fighting capacity in order to be on par with others members.
President Trump said the following during today's NATO summit in Belgium—the first of which he has attended since becoming Command In Chief:
"Members of the alliance must finally contribute their fair share and meet their financial obligations... Twenty-three of the 28-member nations are still not paying what they should be paying and what they are supposed to be paying for their defense. This is not fair to the people and taxpayers of the United States...Two percent is the bare minimum for confronting today's very real and very vicious threats. If NATO countries made their full and complete contributions, then NATO would be even stronger than it is today, especially from the threat of terrorism."
Currently, the US spends 3.61% of its GDP on defense, Greece is second at 2.36%, and little Estonia is third at 2.2%. The UK and Poland also exceed the goal, spending 2.17% and 2.01% respectively. But then you get into the countries who are falling behind; most are, and some of them in drastic fashion. France is close to the goal at 1.8%, and Turkey isn't that far off at 1.69%. Norway is three-quarters of the way there at 1.5%, as are Lithuania, Latvia, and Romania, and Portugal is at 1.4%.
From there, things go south real quick. Germany spends just 1.2% of its GDP on defense, as does the Netherlands, Denmark, Albania, Croatia, and Slovakia. Italy spends 1.11%. Canada spends just over half the stated goal at a paltry 1%, as does the Czech Republic and Hungary. Spain spends 0.9%, as does Belgium. Tiny Luxembourg spends just 0.4% of its GDP on its own defense.
For those countries that are spending, say, 1.5% of GDP and above, getting to the 2% goal seems attainable without major systemic changes in their spending habits. But when you see relatively affluent countries like Germany and Canada being so far off, it is troubling to say the least.
The hard part about the 2% of GDP metric is that every country is unique, with their own histories, pressing issues and challenges. And each member is motivated to spend money on defense due to different elements—some of them geographical, some of them sociological and some are economical. For instance, France largely supports its own defense industry. And just going off a static percentage of GDP figure doesn't tell the whole story as to why a country may be far from the agreed-upon goal.
Member countries also contribute to NATO—as in the institution itself, not their own defense capabilities—based an agreed-upon formula that uses Gross National Income as its leading metric. As a result of this formula, the US contributes the most at roughly 22% of NATO's budget. Germany is next at about 14.5%. France is third at 10.5%, and Britain comes in fourth at 10%. The allies that joined after the fall of the Soviet Union all pay less than 1% of NATO's operating cost. Although these proportions are significantly different than the percentage of GDP figures, they can also be a bit misleading.
NATO's total budget is $2.3 billion. So the US picks up roughly half a billion dollars of that yearly price tag. Germany shells out $333 million. This is not huge money for any of these major players, and NATO represents a great investment, considering what these countries get in return.
Thing is, that 2% of GDP goal, which was reaffirmed during a NATO summit in 2014, is a goal, not an immediate demand. The idea is that everyone would be able to reach that metric by 2024, not within the first year of the Trump administration. But without some sort of prodding or consequences, it is doubtful that such a goal will be achievable by 2024.
There is also the issue of end strength and capability mix. Just having each country spend money on defense in a vacuum is an inefficient way to plan for a common defense under an alliance like NATO. A far more holistic approach cold be introduced to design NATO more along the lines as an integral total force, rather than just a bunch of countries tossing their capabilities into a hat during a time of conflict.
To some degree, this is already happening. There are shared assets that NATO provides, and a rapid response force exists. There is also some thought given to having some counties fill capability gaps where other countries may fall short. Even pooling air transport resources is occurring among some NATO members. The US provides a massive amount of "unique" capabilities to the alliance as well. These large scale include aerial refueling and advanced surveillance and communications capabilities, just to name a few. The US even stockpiles munitions and other expendables that NATO members have pulled from in the past—maybe to too large a degree. But by coordinating and planning more carefully, repeated capabilities that NATO already has an abundance of could be eliminated from some member state's militaries and capability gaps could be filled with those same funds.
Even the US could do more by providing surplus weaponry to less fortunate NATO allies, who can then take the money saved on costly procurement and spend it on operations. This would help with enhancing NATO's military presence in the eastern stretches of Europe, and would mean countries located there could rely less on the US for day-to-day deterrence. In the end it would likely save the US money and enhance NATO's collecting war fighting ability in the process.
The big question is how do you get dozens of NATO member countries to decide on another rubric for required defense spending? Maybe an independent commission could look at each country, their current capabilities, and their own domestic challenges, and collectively decide how much they need to spend. But there would almost certainly be claims of unfairness, corruption, and special interest influence by enacting such a plan.
If the NATO nations could agree in advance to abiding by a panel's decision, maybe it could work. When paired with the broader strategy of melding each country's defense apparatus to prioritize the needs of NATO as a whole, it could go a long way when it comes to getting the most out of defense expenditures made across the NATO alliance. But it would also mean that each country would have to give up a degree of sovereignty when it comes to deciding its own military force mix. As such, less wealthy countries with smaller militaries would be impacted the most by such a scheme.
With all this in mind, it may be imperfect, but the 2% of GDP goal does seem like the most effective and simplest way to get member states to contribute more equally to NATO's common defense. But no matter how one quantifies the issue, the outcome remains the same—many NATO countries need to start spending more on their military capabilities.
Although claims of freeloading on America and the other NATO states that are spending more than 2% GDP on defense may sound harsh, there is truth in those claims. That may have been fine in the pre-2014 reality, before the reawakening of the Russian Bear and the rapid expansion of ISIS, but today it isn't.
So what can be done? Well, Trump is doing the most logical thing—making this a major issue and demanding countries prioritize their fiscal commitment to the alliance. Maybe the messenger isn't to many people's liking, but the message is relevant. In fact, President Obama was on the same page regarding this issue—although the way he described it may have been less controversial, and he never questioned the alliance's relevancy like his successor has.
There has to be some repercussions for those NATO countries that don't meet the 2% of GDP requirement, or that don't come up with a plan to spend more on defense and execute on that plan accordingly. Maybe it's a carrot-and-stick type thing, where the US and the wealthier NATO nations provide extra support and material to less wealthy countries that do meet the goal, and some form of suspension to those that do not.
It may seem harsh, but the alliance is put at risk by those who do not live up to the financial obligations required to support it. With nationalist and inward-looking sentiments growing here in the US and Europe, the idea that some NATO countries subsidize the social programs of other NATO states by taking on more of the burden of collective defense is a talking point that could work to destroy the bedrock of the alliance. You may disagree with it, but many feel that way...and they are making their minds heard at the ballot box.
The world is a different place than it was just a few years ago, and an alliance based on fiscal equality–or at least fiscal minimums—will result in a stronger NATO. Maybe you can't stand Donald Trump, maybe you love him—but either way, he is right to demand that all the countries that benefit from the protection that NATO provides must chose to meet their basic obligations in order to do so. And that includes paying their fair share by funding their own defense adequately.
Contact the author: Tyler@thedrive.com