NATO's strategic framework on how member states are to manage their defense budgets guides that the defense spending of allied nations should be 2 percent of their gross domestic product (GDP), and that at least 20 percent of this budget should be spared for military equipment. There are, however, some views that remain skeptical about NATO's percentile criteria. According to this perspective, reducing burden-sharing issues into mere mathematical parameters might not be a good idea.
Recently, United States President Donald Trump's tasking of Defense Secretary James Mattis and his team with drawing up a new Nuclear Posture Review report for the U.S. will be a key factor in terms of determining the future of Washington's defense guarantees in Europe.
In the event of differences of opinion between Washington and NATO's European allies further widening, the eastern flank of the alliance -- particularly the Baltic states -- will take the brunt of such a negative situation.
NATO Secretary-General Jens Stoltenberg released the alliance's annual report on strategic issues on March 13. Although a number of critical issues, such as NATO's critical capabilities, the threat landscape, and relationships with partner countries are indeed examined in the 120-page report, considerably larger space seems to have been allotted to issues regarding defense economy.
In the foreword of the report, Stoltenberg drops hints about the agenda of the NATO Summit scheduled for the end of May. According to the Secretary-General, alliances are of major importance in a dangerous world. Therefore, efforts of adaptation will be a major agenda item at the Brussels summit. The report noticeably places emphasis on NATO's defense and deterrence capabilities with regard to relations with Russia, as well as the necessity of keeping the channels of dialogue open with Moscow. On the other hand, the use of a decisive tone about the forward military presence in the Baltic states -- Estonia, Latvia and Lithuania -- as well as in Poland, as a result of the summits in Wales in 2014 and Warsaw in 2016, constitutes a balancing factor in a way.
Defense expenditures fall short of specified goals
Based on NATO’s guidelines on member states’ defense budgets, many member states have promised to increase their defense expenditures to reach NATO's critical target of 2 percent by 2024, the report says, adding that European countries and Canada have raised their defense expenditures by around $10 billion compared to 2015, which translates to a growth of 3.8 percent in 2016. In addition, it is further noted that the fact that 18 members have increased the portion they earmark for military equipment and 10 members have already achieved the goal of 20 percent is good news. However, that only three countries in the 28-member alliance met both of the requirements (2 percent - 20 percent) in 2016 is pointed out as a major setback.
Right after reminding that NATO is responsible for defending nearly one billion people in North America and Europe, the Secretary-General's annual report states that the American GDP equates to 46 percent of the GDPs of all alliance members combined, yet Washington makes 68 percent of NATO's combined defense spending. This point being made is very important because the report, in the continuation of the said statement, emphasizes that the defense economy of the U.S. cannot be compared to those of other allies since the U.S. is a global power. However, alliance members have agreed to establish a better balance than the current one.
Defense relations with Europe under Trump
When it is defense economics in question, one cannot help but remember U.S. Defense Secretary James Mattis' stern messages to European allies during the recent NATO Defense Ministers Meeting to urge them to increase their defense expenditures and the negative reaction from European Commission President Jean-Claude Juncker during the Munich Security Conference. Therefore, it would be beneficial to view the latest NATO report from this particular perspective as well.
When NATO defense expenditures are considered through a mathematical measure, indeed, we find that the U.S. defense spending in proportion to its GDP fluctuated between 5.29 percent (2009) and 3.59 percent (2015), and that the European average was much lower as 1.70 percent (2009) and 1.45 percent (2015). Similarly, in the area of defense spending per capita, NATO's European flank spent $503 (2009) to $450 (2014) according to the average data from the period between 2009-2016, whereas the U.S. spending varied in the range of $2,513 (2009) - $1,845 (2015). More openly, Washington, as a matter of fact, attaches greater importance to defense expenditures in comparison to its European allies. Indeed, according to NATO statistics, the U.S. defense spending in 2016 was $679.453 billion, whereas the defense expenditures of the European members of the alliance totaled only $238.844 billion.
Assessing NATO's criteria and defense profiles
As noted earlier, there remain, however, those who suggest that the reduction of NATO's percentile criteria, or more precisely of issues regarding burden-sharing in the area of defense, to mere mathematical parameters might not be a good idea.
In view of these criteria, let us assume that a member state has attained the 2-percent goal for a number of consecutive years; but to what extent would this criterion be accurate and fair in assessing this member's net security and defense contribution to the alliance? Besides, the defense expenditures of those members who fail to make the right decisions in their defense planning would not constitute much of a contribution. In addition to what has been pointed out, those who oppose the application of strictly mathematical criteria in terms of burden-sharing also maintain that the 20-percent criterion may not be distinguishing in any given situation either, adding that a major defense procurement likely to be made within a year might be misleading by producing manipulative outcomes.
Also, the defense budget of Germany, for example, with its annual defense expenditure of over $37 billion, equated to 1.2 percent of its GDP in 2016 and the portion of this amount allocated for military spending was 12.21 percent. Given these facts, if Germany were to meet the 2-percent-20-percent criteria, this would probably trigger a major armament trend, creating a whole new geopolitical scenario in Europe. So, could we possibly say that this kind of change would be welcomed by all of NATO's European allies as well as the German public?
On the other end of the spectrum are the Baltic countries. Even if they could set aside a major portion of their modest economies for military spending, most probably these countries could not -- without the support of the Alliance -- defend themselves against a massive conventional incursion because of demographic and geographical handicaps. More precisely, much as the 20-percent goal seems more realistic than the 2-percent one, neither is a silver bullet; we can say that they are more of indicators rather than absolute solutions.
On the other hand, as mentioned above, we can still say that the 20-percent criterion is more objective in terms of indicating the degree of importance a country attaches to military modernization in its defense planning. As a matter of fact, in the case of Turkey from the viewpoint of the NATO framework, Ankara's defense spending never went below the 20-percent threshold during the 2009-2016 period, which is an important indicator, since Turkey is a NATO member that prioritizes its defense capabilities as it is situated in a challenging region of the world and has had to carry out large-scale military operations beyond its borders, fighting terrorism and hybrid threats.
Nuclear deterrence mechanism
In a number of analyses about the changes that may occur in security relations between the U.S. and Europe, it is envisaged that some European countries may opt for a more comprehensive defense cooperation among themselves in the event Washington sticks to its current behavior. In this context, there are conventional joint military projects, such as the formation of a strategic airlift fleet of C-130s by Germany and France, and Dutch support to this fleet with A-330s from its inventory is also envisaged. Besides, it is as noteworthy that some figures have started to highlight the idea of a European capacity for nuclear deterrence that would center on the French national nuclear capabilities.
A speculative idea yet, the European Union's forming its own nuclear deterrence mechanisms -- which would rely on France once Brexit is complete -- will remain mere rhetoric with probably no chance of ever becoming a reality. Some of the major and difficult-to-overcome obstacles that would emerge in relation to such a mechanism in Europe are that there would be a difficulty posed by a joint command and control structure, Paris would definitely be unwilling to relinquish its nuclear capabilities to a higher authority, a new set of problems that would emerge on the basis of defense economies, and powerful anti-nuclear political movements in Europe. It is, on the other hand, still significant that these claims, albeit mere rhetoric as of yet, have been made a part of the agenda through the efforts of Polish figures at the outset.
Of course, President Trump's tasking Defense Secretary Mattis and his team with preparing a review document about U.S. nuclear capabilities -- Nuclear Posture Review (NPR) -- will have a bearing in terms of Washington's defense guarantees in Europe. The current U.S. NPR report was prepared in 2010 by the Obama administration. In order to develop a good understanding of the Trump administration’s attitude in this regard, as well as their assessments on the U.S. nuclear presence in Europe, one would have to wait for the new NPR report.
Baltic states and the situation in NATO's eastern flank
Not every European country would be affected to the same degree by the military-political fluctuations that might be experienced in U.S.-Europe relations in the Trump era and with Secretary Mattis' defense portfolio management.
For example, France and the United Kingdom have a critical advantage of having their own nuclear deterrence capabilities. Ankara, despite all difficulties, has a thriving defense industry. Furthermore, Turkey has demonstrated its military capabilities by deploying its land forces against Daesh, carrying out a joint military operation beyond its borders and achieving a major military victory against the terrorist organization in Al-Bab. Just like many other Western countries, Italy is currently focused on the fight against terrorism rather than on a conventional military threat as well as on the efforts of EUNAVOR (the EU's naval force) against human trafficking. We could provide many other examples; however, we need to ultimately emphasize that the fact that the gradations of threat that, say, a Belgian or Spanish official receives at intelligence briefings are different from those received by Polish or Estonian officials is not surprising.
More precisely, if the differences of opinion between Washington and NATO's European allies further widen, the alliance's eastern flank -- and particularly the Baltic states -- will be most affected. Therefore, the first NATO summit that President Trump will attend in Brussels in 2017 is sure to cause the greatest apprehension in these nations.
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