By: Brian Cox
It is fairly well known that NATO member states pledge to spend 2 percent of GDP on military expenditures. That being said, in 2012 only two European nations, Estonia and the United Kingdom, met this mark. While the defense climate in Europe has substantially changed between 2012 and the present, and there is currently a move to increase spending on the whole it has yet to be seen whether this movement is an immediate response to Russian aggression in Eastern Europe, or if this is part of a longer term trend. NATO defense spending during the cold war was significantly higher, due to the proximity of threat, but throughout the cold war the US still easily accounted for a plurality of worldwide defense spending, and had substantial amounts of assets throughout Europe. Following the Cold War, due to the policy of the peace dividend, the US decreased its military spending substantially. Nonetheless, the figure remained just below 4 percent. There was widespread academic discussion as to the ongoing role and requirements for the American military going forwards. The necessity of the US to fight a war on two fronts was questioned, and the need for some requisitions was put on hold. The number of B2 bombers purchased was sharply cut, and emphasis was put on preventing known hotspots, such as Bosnia and Iraq, from getting out of hand. This sort of analysis prevalent throughout the late 1990s foresaw neither an aggressive stance from Russia, nor the chain of conflicts in the Middle East and the Islamic State. By August 2003, after a long drawdown in military spending, the US and Western European nations were ready to increase defense spending, and did so. However, it has been noted that in general and increase in defense spending, is accompanied by long run public opinion that defense spending should be decreased (in the West). This holds true in the US as well, although US defense spending in real and relative terms grossly surpasses anything in Western Europe.
Members may aim to hit the 2 percent threshold for many reasons, but the two most common reasons are to avoid being seen as a free-rider, and attempting to defend itself because it feels under threat. This is well reflected by recent changes in military spending. France, which found itself the target of a large-scale terrorist attack, has maintained and slightly expanded its military budget for 2015, despite planning cuts to ameliorate its budget shortfalls. Other nations, such as Estonia and Latvia, have sharply increased their military spending, likely in part due to their proximity to Russia, in the wake of the seizing of Crimea. Such attempts to avoid looking like a free rider also depend on public perception in these nations. If the constituents of governments do not care about the ramifications of being seen as a free rider, the pressure to maintain higher levels of military spending are limited, and the population would prefer to reallocate this spending into other matters, such as social welfare or health care. Interestingly, a study found that on the whole publics do not care about being seen as a free rider, but do care when they perceive money is being over allocated into defense.
US defense spending is much higher than European defense spending, and recently decided to increase military assets in Europe, citing a “new situation, in which Russia has become a more difficult actor.” With both NATO and the US concerned by Russia, it would be a reasonable question to ask what response has been taken. US military spending has remained relatively constant, although still makes up around half of global military expenditures, dwarfing that of Russia, or even the entire EU. The recent IAI (Instituto Affari Internazionali, or Institute for International Affairs of Italy) study does indicate that larger states have taken this into account, but many EU members such as Ireland are still spending under 1 percent of GDP. In general, the trend has been that those nations which are not under austerity are responding by increasing defense investment. That being said, nations under austerity see defense spending as the first part of the budget to cut, for reasons probably related to NATO and the United States. A cut in defense spending would not be seen as being independently dangerous, especially for a small nation whose defense budget is dwarfed by that of the United States, or even large European NATO members such as Germany. Though Germany is well-shy of 2 percent of GDP expenditures, its large GDP does mean that its net spending still dwarfs that of nations such as Latvia and Estonia which are meeting their 2 percent targets. This is not to say that the threshold does not improve defense capabilities in Europe. Austria, which is not a NATO nation, but can largely expect support from its neighbors, spends .7 percent of GDP on its military, largely under the assumption that other nations will defend it.
This discrepancy in defense spending between small and large states, as well as NATO and non-NATO members ultimately may account for this sort of extremely low defense spending. NATO members on the whole spend substantially more than their non-NATO counterparts.
More recently, however, we have seen European defense spending, especially among Eastern European states, spike. In 2014, the US, as well as France, Greece, Turkey, the UK and Estonia were at 2 percent, with Poland and Portugal just shy, and aiming for 2 percent. As the European economy slowly improves, and the threat of Russia is increasingly felt, more and more states are likely to increase spending, albeit slowly.
A large part of this US-Europe discrepancy could be attributed to the role of the military. After all, Hastings Ismay said the purpose of NATO was “to keep the Russians out, the Americans in, and the Germans down.” With 2 percent thresholds to keep the Americans in, a strong defense in the east to keep the Russians out, and a focus on UK and US military capabilities over German ones, this got NATO through the cold war. However, this paradigm no longer truly holds for Germany, and the Americans are increasingly looking elsewhere. The United States still wishes to be able to project its power abroad via its military. France, another nation which is above the 2 percent threshold has recently spoken of more direct intervention against IS, and invoked EU article 42.7, the “Mutual Defense” clause. This clause obligates EU states to provide aid and assistance, to any member of the EU which is the victim of “armed aggression on its territory”. This opened questions as to the scope of the clause’s requirements, but nonetheless marked the first invocation of this clause. Notably, this is shy of invoking Article 5, the mutual self-defense clause in NATO, which has only been invoked once, following the 9/11 terrorist attacks.
With much of Europe satisfied with security, and existing treaties and frameworks (such as NATO article 5) guaranteeing them defense against foreign aggression, the need for a strong defensive force is limited. While the merits of a military capable of foreign interventions and power projection mixed, military spending by the US certainly produces positive externalities for Western European states with much lower defense spending, but much higher spending on social welfare. While the EU does benefit from American military capabilities, the US doesn’t benefit directly from European social welfare. Largely to this end, the US has been placing increasing pressure on Germany to increase its military spending, and succeeded in early 2016, when Angela Merkel asked for a substantial increase to German military spending. Many sources reported that it was largely due to american pressure that this request for an increase in military spending was submitted. Nonetheless, a 4 percent increase to existing German defense spending is a drop in the bucket. This event shows just how long of a road it will be for the EU to rebuild a capable military, not reliant on an increasingly spread US military. While it’s unlikely that the US will abandon its allies, its increasing pivot to Asia will likely lessen its ability to protect Western Europe. Should this happen, how capable will Europe be of defending itself from Russia, or other external threats? If the reluctance of European leaders to increase defense spending is indicative, the security situation in Europe could remain poor for many years to come.
Image by NATO Summit Wales 2014