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Dissecting the NATO summit and defence spending

By Jacqueline Westermann

America’s allies will be sighing with relief now that President Trump is heading back to Washington.

First, fellow NATO members had to cope with the usual outbursts over two days in Brussels (and the UK even longer throughout the subsequent state visit), which even led to an emergency meeting. The US threat ‘to go its own way’ if allies didn’t increase their defence spending by early next year caused alarm, as expected. Over the weekend, Trump managed to lash out again, stating that the EU was America’s ‘foe’. The next day, European allies had to watch Trump buddying up to President Vladimir Putin in Helsinki.

The Communiqué agreed at the NATO summit featured unprecedented criticism of the Russian government. It also reiterated support to Ukraine, repeating the refusal to acknowledge the Kremlin’s illegal annexation of Crimea, which was feared to be an easy bargain for Trump in the one-on-one meeting in Helsinki. In the end, despite the questionable statements following the meeting, one relief was that Trump stuck to what the allies had agreed on in the Communiqué; staying put to US (and NATO) policy on Crimea. 

Although the summit led to a Communiqué acknowledging new and old threat environments, Trump’s preferred topic dominated the reporting and meetings: defence spending.

The decade-old issue is one that past administrations also grappled with. However, Trump put the debate front and centre, unlike his predecessors, by actually threatening consequences. It seems the allies are now looking a bit closer at the issue. However, another debate has become louder of late: whether burden-sharing should be determined by defence spending levels, or whether other factors should be considered when valuing contributions to NATO.

The Center for Strategic and International Studies recently published a report exploring alternative metrics to the two per cent threshold:

  • Troop contribution: While some allies might be spending two per cent of GDP, their contribution to missions and operations is poor. Greece spent 2.36 per cent last year but contributes poorly to the Afghanistan mission and has zero soldiers present in NATO’s enhanced forward presence or the global coalition against ISIS.
  • Security assistance as share of GDP: Investments made outside defence budgets can still contribute directly to peace and security. Germany, Netherlands and Norway invest a significant GDP share into peacekeeping, training missions, rule of law strengthening or crisis management.
  • Distribution of defence expenditure by categories: It doesn’t matter how much is spent if the output doesn’t contribute to readying capabilities. Portugal spends 78 per cent of its entire defence budget on personnel, and the two biggest spenders within the more than 2 per cent group are the US at 42 per cent, and Greece at roughly 72 per cent.
  • Trade with sanctioned competitors: Members are sacrificing trade benefits for the alliance’s interest. Sanctions against Russia, for example, have cost millions for the Netherlands, Turkey and Germany.
  • Average refugee intake: Showing willingness to managing growing refugee and migration numbers demonstrates willingness to create stability and security for the allies. Turkey and Germany are shouldering a disproportionately large burden. 
  • Pre-crisis mobility: Discrepancies between spending and end strength can be assessed on the day-to-day readiness. Italy and Germany have lower defence expenditure than Greece but a very high mobility. Diplomatic hurdles to military mobility across borders were also a topic in the summit Communiqué.

All these factors have advantages and shortcomings. Changing the discourse from input to output would be a solid first step, as it would allow a combination of different values to be used in assessing the burden-sharing of members.

The ‘Four Thirties’ initiative, agreed in June, now official with the summit’s Communiqué, for example is a step closer to more output-orientation: 30 mechanised
battalions, 30 air squadrons and 30 combat vessels will be ready within 30 days or less.

Originally published by: Australian Defence Magazine on 19 Jul 2018