Paying for NATO

Hany Ghoraba
Thursday 19 Jul 2018

NATO members would be wrong to resist US President Donald Trump’s demands for increased defence expenditure

During his recent trip to Europe US President Donald Trump faced a new challenge with his European allies over the status of the North Atlantic Treaty Organisation (NATO). Some 70 per cent of the costs of this are paid by the United States, while the rest is shared by the other members of the alliance.

Trump urged European leaders to pay their share of the costs of NATO, calculated at defence costs of two per cent of GDP. NATO defence expenditures rose in 2017 to $946 billion, over $616 billion of which is paid by the US. NATO defence expenditure is now equal to some 70 per cent of the world total, and the burden carried by the United States to sustain NATO, established in 1949 to counter the former Soviet Union, is enormous, with the country spending some 3.58 per cent of its GDP on defence.

While the US is the world’s largest economy, it is also the most indebted country in NATO. Only five other countries in the alliance, Greece, Albania, Romania, Estonia and Poland, meet the two per cent of GDP contribution, while the rest, including economic powerhouses such as Germany, France and Italy, contribute much less than agreed.

The European failure adequately to contribute to the NATO alliance has irked many US politicians for years, especially since times have changed from the immediate post-World War II period when the European countries were still in ruins to the economic prosperity they enjoy today.

In 2018, the citizens of countries such as Germany, Norway and Denmark enjoy a higher standard of living compared to their US counterparts, yet they contribute less to the NATO alliance in terms of the percentage of GDP spent on defence than the US.

Trump’s demand for all the countries in the alliance to meet their quotas may seem blunt, but it is only fair since the massive defence budget of the US is a considerable burden and social, educational and scientific programmes in the US may have been cancelled in order to meet it.

All of this raises the question of whether NATO is still worth supporting, since the threat of the former Soviet Union disappeared in 1991, even if its successor state, the Russian Federation, is as powerful as ever.

However, while the expansionist doctrines of the former USSR and its control over the Eastern European countries may be no more, the ambitions of Russian President Vladimir Putin to restore the glories of Imperial Russia rather than the expansionist ambitions of the USSR still make NATO vigilance paramount.

This is especially the case given Russia’s incursions into Ukraine and its annexation of the Crimea, still a major issue of contention between NATO and Russia.

NATO’s rising expenditures and vigilant stance do not seem to match with Trump’s description of Putin as a “competitor” and not an “enemy” during the recent NATO meeting in Brussels in the run-up to his meeting with Putin in Helsinki.

Putin the “competitor” seems an ironic name and one which brings back memories of the nicknames given to Russian leaders such as father of modern Russia Tsar Peter the Great (1672-1725) and the earlier Tsar Ivan the Terrible (1530-1584).

Putin the “competitor” is still a source of fear for many European leaders, especially UK Prime Minister Theresa May who considers him to be a major threat to her country and all of Europe.

She believes in the importance of NATO as a defence against Russia, even if her country does not contribute to its budget by two per cent of GDP spending on defence.

French President Emmanuel Macron also declared his country’s commitment to meet the two per cent quota by 2024 but not immediately as Trump would have liked.

The leaders of the NATO countries cannot easily increase their defence spending to two or even four per cent of GDP, as Trump has demanded, as this would burden budgets that are already strained due to the economic recession in Europe since the world financial crisis in 2008.

Trump’s increasing tariffs on products from Germany and France will also not help his demands for a raise in European defence budgets.

Nevertheless, despite their differences both sides see the importance of NATO to their political and defence strategies despite the economic burden.

The military industries in the NATO countries, especially the United States, benefit greatly from the existence of the alliance, and dismantling it would spell ruin for them and have a negative impact on the wider economy.

NATO membership has also benefited the European countries greatly and allowed defence budgets to be channeled into other fields such as education and welfare, paving the way for the leading status of the EU countries today.

However, the fear of facing Putin’s Russia alone may force European leaders to yield to Trump’s demands, as paying two per cent or more of GDP for NATO membership is still cheaper than bearing the cost of raising larger standing armies in the face of possible future threats.

The European and Americans also have other fears to face in these uncertain times, including Iran, North Korea, and terrorist groups such as Al-Qaeda and Islamic State, for which the existence of NATO is a huge security boost.

Despite its economic and political shortcomings, NATO remains a necessity for its members as their economies and security measures have been built on its existence. Dismantling it now will cause more problems than gains.

The writer is a political analyst and author of Egypt’s Arab Spring and the Winding Road to Democracy.

*A version of this article appears in print in the 19 July 2018 edition of Al-Ahram Weekly under the headline: Paying for NATO 

Short link: