Mattis' mixed message on money is seen as an "ambiguous" signal from Trump on collective commitment. The European Commission, for its part, says demanding "military" spending overlooks other security investments.
A day after he warned NATO allies the United States might "moderate" its own contribution if European defense spending doesn't dramatically rise, Defense Secretary James Mattis declined to specify what shape that penalty might take. "I'd prefer not to," Mattis said, when asked for clarification at a news conference. "That's a headline I do not anticipate ever seeing."
At the risk of calling his own bluff, Mattis went on to explain that "[s]ometimes you say the things you don't want to have happen so that you head them off." He said he was leaving his first meeting of the alliance "very optimistic" the worst-case scenario would not come to pass.
But that didn't assuage all European observers. Despite Mattis' pledge at the same news conference that NATO's Article 5 collective-defense guarantee remains "rock solid," Bruno Lete from the German Marshall Fund warned the Trump Administration threat risks turning "unconditional solidarity into a financial transaction."
"If money – rather than norms, values and principles – becomes the only reason the U.S. honors its Article 5 treaty obligations," Lete said, "then I am afraid it is the beginning of the end of the alliance."
Analyst Jan Techau from the American Academy in Berlin was more cautious, calling the US announcement an "ambiguous sign" even after Mattis' qualifications about Article 5.
"Nobody knows what the American standard will be for failing or passing 'the test'," Techau said. "I just think it's creating insecurity. It reduces the strategic value of the security guarantee."
Currently only five NATO members meet the 2-percent threshold, including the US, though the overall downward trend in spending was reversed last year and more countries will meet the target in 2018.
NATO Secretary General Jens Stoltenberg and Mattis himself said European allies had responded positively to the demand for faster upscaling of budgets. Speaking on the sidelines of the meeting, Lithuanian Defense Minister Raimundas Karoblis concurred he had no problem with it. Lithuania's defense budget will hit the mark next year.
"For me the main message from Mr. Mattis was that the US would continue its commitment toward NATO and the collective system," Karoblis said. Asked what could happen to the alliance's unity if some members don't achieve the right funding level, Karoblis basically shrugged. "We are not speaking about the 'moderation', but about the financing. We don't have any doubts about the commitment of the US."
But Techau was skeptical allies were actually that sanguine. "can the Europeans be happy with the way the Americans are turning this into an ultimatum?" he asked. "No they can't."
Lete also says allies should be more worried than they're letting on. "I'm concerned that 'America first' and NATO solidarity are concepts that cannot be converged," he said.
Meanwhile in Munich, where the annual Munich Security Conference is getting underway, European Commission President Jean-Claude Juncker took the Trump position to task.
In a speech, Juncker said the US view of what's important spending for security is overly narrow.
Juncker pointed out that Germany, for example, would lose its budget surplus if it adhered to US demands and increased its defense budget from the current 1.22% up to 2%.
"I am very much against letting ourselves be pushed into this," Juncker said.