In peacetime, NATO countries have set a target of increasing their defense spending towards two percent of economic output. Some countries now want to significantly tighten the target.
There is a risk of a new dispute within NATO over the level of defense spending by member states. According to Secretary General Jens Stoltenberg, some of the Allies want to significantly tighten the current two percent target. He predicts that, by 2024, all NATO countries should approach the target of spending at least two percent of their gross domestic product (GDP) on defence.
“Some allies are determined to make the current target of two percent a minimum,” Stoltenberg said in an interview with the German Press Agency. As chairman of the North Atlantic Council, he will now lead negotiations on the issue. “We’re going to meet, we’re going to have ministerial meetings, we’re going to talk in the capitals,” he said.
The objective is, therefore, to reach an agreement at the latest at the next regular summit. It will be organized in the capital of Lithuania, Vilnius, on the 11th and 12th of July.
Germany is below the two percent mark
Stoltenberg did not say which NATO countries are calling for a significantly more ambitious target. According to diplomats, eastern alliance states such as Poland and Lithuania, as well as Britain, have recently come out in favor of an agreement on stricter guidelines in view of Russia’s war against Ukraine. Germany and some other countries like Canada and Belgium are considered to oppose this idea. So far they have spent significantly less than two percent of GDP on defense. For Germany, for example, only a rate of 1.44% was expected for 2022.
According to a study by the German Economic Institute (IW), even the recently decided special fund of €100 billion is unlikely to bring a long-term improvement. According to calculations, NATO’s two percent quota could only be reached with the money in 2024 and 2025. According to previous financial plans and growth forecasts, the share of GDP could fall to 1.8 and 1.2 per cent. percent over the next two years.
Opponents of binding financial targets argue that the ratio of GDP says little about military performance and that NATO capability targets and their compliance are far more important and meaningful. An example given is that the rate does not fall if a country cuts its defense spending accordingly in the event of a decline in economic output.
Stoltenberg declined to say whether he personally supports minimum wage requirements. However, he made it clear that he considers a further increase in defense spending to be indispensable. “NATO is there to ensure that a conflict like the one in Ukraine does not extend beyond Ukraine. To do that, we need credible deterrence and defense, which is why we need to invest more in our security.”
“Of course, it’s always easier to invest in education or infrastructure,” Stoltenberg said. But if you don’t keep the peace, you won’t create anything else, and you won’t secure economic prosperity or win the fight against climate change. “As the world becomes more dangerous, we need to invest more to prevent war,” he argued.
Referring to the Vilnius summit, Stoltenberg said: “I think it’s too early to say what our allies will agree on.” However, he assumes that all allies know that the war in Ukraine makes defense investments even more important. He is sure there will be an agreement at the Lithuanian summit.
According to NATO figures, the leader in the relationship between economic power and defense spending was Greece with a value of 3.76 percent. Next is the United States with 3.47 percent, which in absolute terms at US$822 billion (€768 billion) recently spent more than twice as much on defense as all other alliance states combined. For comparison: Germany, the largest European economy, spent 55.6 billion euros according to NATO standards, Great Britain as number one in Europe, about 53.9 billion pounds (60.9 billion euros).
Poland and the Baltic states of Lithuania, Latvia and Estonia are currently considered to be particularly ambitious when it comes to increasing defense spending. They all want to achieve a GDP rate of at least three percent in the future. More recently, according to alliance numbers, they were between 2.5 and 2.0 percent.
The dispute over defense spending at NATO last flared up during US President Donald Trump’s tenure. He accused European allies such as Germany of free riding and at times even threatened that the United States would leave the alliance.
(APA/dpa)