At least two percent of GDP: NATO countries agree on new defense spending target

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In view of the threat posed by Russia, NATO countries have agreed to tighten the common target for national defense spending. The 31 alliance members want to spend at least two percent of their gross domestic product (GDP) on defense in the future. The German news agency learned this from alliance circles on Friday after the conclusion of a written decision-making process in preparation for next week’s NATO summit.

The previous goal only stipulated that all allied states come close to the benchmark of spending at least two percent of their GDP on defense by 2024. It was adopted at a summit in Wales in 2014.

Significantly higher costs

For Germany and nearly 20 other NATO countries, the new target means that they will have to significantly increase their defense spending in the coming years. The Federal Republic recently increased its NATO-relevant spending by ten percent to about €64 billion. So far, however, the alliance has fallen far short of its goal. According to current comparative figures, NATO estimates that Germany will achieve a quota of 1.57 percent this year.

With the help of a special fund for defense of 100 billion euros, which was decided last year, the quota of 2 percent must now be met in 2024. However, it is unclear how things will continue once the special fund has been used up. According to a study by the German Economic Institute (IW), the share of GDP could fall below two percent as early as 2026.

Most recently, the US led NATO in the relationship between economic power and defense spending. According to estimates published Friday, they currently have a rate of 3.49 percent. At $860 billion, Washington recently planned more than twice as much defense spending as all other alliance states combined.

Besides the US, according to the latest NATO estimates, only Britain, Finland, Greece, Hungary, Poland, Lithuania, Estonia, Latvia, Romania and Slovakia will meet the 2% target by 2023.

Germany wanted a vague target

In the discussion about the new target, the German federal government had long tried to keep the specifications as vague as possible. It was argued that the GDP ratio says little about the performance of the armed forces and that NATO targets, for example for military capabilities and compliance, are much more important and meaningful. As proof of this, it is argued that the rate does not fall if a country cuts its defense spending accordingly when economic output falls.

Recently, however, the federal government at least agreed to set the 2 percent minimum target. Chancellor Olaf Scholz (65) recently repeatedly emphasized in public that Germany would permanently increase its defense spending to two percent of gross domestic product. In the discussion about the new goal, the Baltic countries and Poland in particular had expressed themselves in favor of a much more ambitious self-involvement. Estonian minister Hanno Pevkur (46) recently called for a target of 2.5 percent.

The dispute over defense spending in NATO was particularly difficult during the tenure of US President Donald Trump (77). He had accused European allies such as Germany of piggybacking and at times even threatened that the United States would leave the alliance.

The new 2% target must now be included in the statement from the NATO summit, which begins on Tuesday in the Lithuanian capital Vilnius. The summit will also be about strengthening deterrence against Russia and continuing support to Ukraine. (SDA)

Source: Blick