This report updates a previous version to reflect the developments at the July Summit and the fact NATO issued a new set of defense spending data on the day before the Summit that cover FY2018. This data provides a far more current summary of spending and burden sharing trends than the previous NATO data.
NATO’s July 2018 summit meeting has been one of the most divisive meetings in the Alliance’s history. Regardless of whether NATO can now cover its internal divisions up with some kind of public façade, President Trump’s confrontational bargaining style has divided the U.S. from its allies over other issues like trade and tariffs, how to deal with Russia, the JCPOA agreement with Iran, refugees, the search for an Israeli-Palestinian peace settlement, the environment, and even German gas imports from Russia. Transatlantic unity is at something approaching a record low.
The immediate issue for NATO, however, is burden-sharing as measured in percentages of defense spending. President Trump has put growing pressure on America’s European allies to meet NATO’s two major goals: spending 2% of each country’s GDP on defense, and 20% of defense spending on equipment purchases. Goals that NATO set in 2014, with the further goal that they should be met by 2024, but that have since been treated as the key political metrics of what current national burdensharing performance should be.
Focusing on the Wrong Goals and Dividing the Alliance
At the July NATO summit meeting, President Trump called for the 2% goal be raised to 4%, This call may have been more a bargaining tactic than one made with any real expectation of success, but it highlights the divisions in the Alliance with little chance of any real success. The data in this analysis show that a number of European countries have made real increases in their defense spending, and for some, this has increased the percentage of their GDP they spend on defense.
Most European countries, however, will still fall far short of reaching the 2% goal in the near future. Moreover, many that are increasing their spending are still spending less in current dollars than they did in 2010. This means that they need to compensate for years of underspending and failing to reshape their forces to meet new challenges from Russia and from extremism and terrorism.
European countries have steadily taken too large a "peace dividend" since the break-up of the Soviet Union and Warsaw Pact in 1991, and cut its forces and their readiness, and failed to modernize, at at the needed level.
At the same time, NATO's current approach to burden-sharing is a critical part of the problem. President Trump is all too correct in calling for more European effort.
However, he has focused on NATO's percentage goals – the wrong measures of burden-sharing – rather than the changes in strategy, force planning, and spending necessary to create the forces NATO actually needs to deter and defend. (end of excerpt)
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