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Yes, NATO is sharing the defense burden. Here’s what we found.

- December 9, 2016

Since the United Kingdom’s “Brexit” referendum in June, European leaders have been working to reinvigorate the notion of European defense integration, while taking care to avoid Madeleine Albright’s famous three D’s with regard to NATO: duplication (of NATO efforts), decoupling (the United States from Europe) and discrimination (against non-European Union member states in NATO).

The election of Donald Trump as the next U.S. president has added urgency to this effort, perhaps reflected in the E.U.’s plan to implement its new Global Strategy.

As a candidate, Donald Trump complained about the U.S.’ “disproportionate share” of transatlantic security costs. It’s not a new gripe: President Obama lamented Europe’s “free riders,” while Defense Secretary Robert Gates in 2011 warned of a “dim if not dismal” future if alliance members didn’t pick up their share of the tab.

President John F. Kennedy was as direct in private as Trump has been in public, telling his National Security Council in 1963 that “NATO states are not paying for their fair share and living off the ‘fat of the land.’ ”

Allies boost NATO spending

But lost in the 2016 campaign rhetoric is the reality that NATO defense spending appears to have “turned a corner.” At the Wales Summit in September 2014, Alliance leaders pledged, for the first time publicly, to “reverse the trend of declining defense budgets.” Each NATO member committed to move toward spending 2 percent of GDP on defense — and 20 percent of defense budgets on equipment modernization. Our research shows a positive shift in burden-sharing (see Figures 1 and 2).

Since the Wales Pledge, 22 allies have increased real defense spending, and 20 have increased defense spending as a share of GDP. The number of allies spending at least 2 percent of GDP on defense has risen from three to five since 2014, and the number of allies allocating at least 20 percent of defense spending to equipment modernization has risen from eight to 10 over that period. The U.S. stands to benefit from this shift, with no need for the new U.S. administration to talk of leaving European allies to defend themselves.

Figure 2: Annual change in NATO allies’ equipment spending, 2010-2016. Also in line with public commitments made at the 2014 Wales Summit, the rest of NATO increased equipment spending by nearly 5 percent in 2015 and over 10 percent in 2016, reversing a multiyear decline. Data source: NATO

These trends suggest that NATO offers a platform to support collective action to boost burden-sharing on defense. Other research shows that NATO allies do not engage in “free-riding” any more than E.U. members who are not part of NATO. For example, neutral Sweden appears to free-ride (measured by negative correlation between its defense spending and that of the United States) as much (if not more) than its neighbor Norway, a NATO member.

Our research on strategy and strategic culture finds that the language in key strategic documents affects how states allocate resources. We looked at 95 national security strategy documents to gauge how states viewed the defense of Europe, specifically looking at the language in these documents.

We used “Wordscores” content analysis to score each document from 0 (minimally Atlanticist) to 100 (maximally Atlanticist). The more documents reflected an “Atlanticist” approach — a view that the U.S. plays a central role in European security — the more countries tended to engage in the kind of burden-sharing behavior that the U.S. has preferred (see Figure 3).

MALESKY Fig 3 Atlanticism_OnM

Figure 3: Atlanticism and Operations Expenditures. “Europeanist” nations like France are more likely to seek a Europe-centered security strategy, while “Atlanticist” nations like the U.K. see a clear role for the U.S. in maintaining the security of Europe. During 1995-2012, the more Atlanticist states spent more on operations and maintenance (O&M), which we focused on as a “primary way of funding readiness,” and an important indicator of functional alliance solidarity during this time frame, when the United States encouraged allies to participate in joint training along with combat operations outside of allied territory. (Data source: NATO)

Encouraging NATO allies to incorporate the commitments made at the Wales Summit into national security strategies will be an ongoing challenge. A less Atlanticist Europe that feels itself adrift from the U.S. may spend more on defense because it feels more threatened — but that spending is unlikely to align with U.S. interests.

Atlanticism is therefore worth tending to by continuing to demonstrate transatlantic solidarity, particularly after allies agreed publicly in Wales to greater burden-sharing. A continued sense of transatlantic solidarity improves the odds that European allies engage in the kind of burden-sharing behavior the U.S. has sought.

Allies can influence the development of other NATO members’ national strategic approaches both bilaterally and multilaterally. NATO’s Defense Planning Process, for example, seeks to harmonize national strategic and defense planning among allies.

Checking in on NATO commitments

NATO member documents reveal that both the Czech Republic and U.K. security plans explicitly transmit the Wales pledge into national security planning. France’s 2015 update to its Loi de Programmation Militaire is somewhat less explicit on this point. Italy’s Defense White Paper acknowledges the need to increase defense investment.

While Denmark’s current Defense Agreement makes significant increases unlikely before 2018, the recent Review of Denmark’s Foreign and Security Policy argued that “Denmark should halt the downward trend in defense expenditure, and — in the course of the next defense agreement period of 2017-2022 — increase the defense budget as a share of GDP in accordance with Denmark’s NATO commitments.” Germany’s White Paper on defense is more ambitious than previous editions as well, as is Norway’s recent Long-Term Defense Plan. Hungary, Latvia, Lithuania, Poland and Romania all adapted national fiscal and defense legislation in line with commitments made at Wales.

Domestic and E.U. political economies also affect defense investment. When unemployment on both sides of the Atlantic jumped after 2008, countries shifted defense resources into personnel, rather than equipment. NATO states experiencing deficits and constrained by national fiscal rules or E.U.-level sanctions also shifted limited fiscal resources away from defense.

Transatlantic defense burden-sharing will remain a challenging collective action problem for the Trump administration. NATO has served as an excellent institutional forum to address that problem politically, and the Wales pledge on defense investment represents a real achievement in that sense.

To meet the Wales pledge goals, though, a critical next step is for allies to incorporate both the letter and the spirit of the Wales pledge into national defense and fiscal planning. Doing so will likely require updating the transatlantic bargain to address the strategic risks posed by economic difficulties and fiscal austerity.

Jordan Becker is a defense policy adviser at the U.S. Mission to NATO. The views expressed here are his alone, and do not reflect official U.S. government positions.

Edmund Malesky is a professor of political science at Duke University.