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NATO Funding and the Challenge of European Defense

by Richard A Reagan

On his first foreign tour, President Trump castigated many members of the NATO military alliance for not paying their fair share for common defense. NATO targets a spending figure of 2% of gross domestic product for its member nations, but most NATO members don’t spend anywhere close to that figure. President Trump’s frustration mirrors discontent within the United States that American taxpayers are essentially subsidizing the defense of Europe.

Defense Spending Guidelines

Among NATO members, only Greece, Estonia, the UK, Poland, and the United States meet the 2% of GDP spending target. Greece has historically spent more on defense because it feels threatened by Turkey, another NATO nation with which it has in the past come to blows. Estonia and Poland have historical reasons for their spending too, given their histories with Russia and the Soviet Union. The US of course spends more on its military than any other country in the world, and the UK with its special relationship with the US tries to keep in step.

Spending on NATO Itself

NATO as a military alliance doesn’t have a huge budget for itself. The NATO structure itself is funded by member nations, based on their gross national income. This budget doesn’t actually buy equipment or pay for troops, it just funds the headquarters in Europe, the military command structure, and some limited military capabilities.

The Problems With Two Percent

Not all countries are able to commit two percent of their GDP to military spending, and for some it really doesn’t make sense to spend money just for the sake of reaching that target. For instance, smaller countries such as Luxembourg, which has a military of 450 men, or Iceland, which doesn’t have a standing army, only a police force and coast guard, wouldn’t really benefit from spending more on defense because they rely on their larger neighbors for protection. The real anger is directed at countries like Germany, France, Italy, and Spain, which have resources and defense industries that could support a 2% target but who choose not to.

Fear of Russian Aggression

The driving force behind members reaching their two percent target in the future will be the extent to which they fear that Russia is an aggressive force in Europe. Countries such as the Baltics (Latvia, Lithuania, Estonia) and Poland, which have historically had strained relationships with Russia may very well reach and exceed that two percent target. But now that Eastern European countries have acceded to NATO, they have created a buffer between Russia and Western Europe that puts even less pressure on Western European nations to increase their defense budgets.

The United States’ Umbrella

In large part, the unwillingness on the part of European nations to spend money on their national defense stems from the role that the United States has played in Europe since the end of World War II. With military bases spread throughout Europe, the US took the lead in defending Europe against the Soviet threat. After the Soviet Union’s collapse, the US maintained its network of military installations in Europe, even expanding into Eastern Europe in response to conflict in the Balkans and the Middle East. As long as the United States continues to spend money on Europe’s defense, Europeans won’t feel the pressure to pay for their own defense. It may take a threat from President Trump to withdraw or reduce the American presence in Europe for NATO members in Europe to take seriously their responsibility for their own defense.

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