NATO defence spending is rising, but not fast enough - The Economist

NATO LEADERS had a packed agenda at their summit in Vilnius, Lithuania’s capital, on July 11th and 12th. Two bids for accession dominated headlines. Sweden is almost certain to join the alliance after Turkey agreed to lift its veto. But Ukraine’s path remains less clear: NATO promised membership only “when allies agree and conditions are met”. Meanwhile, the alliance also approved its first comprehensive defence plans since the cold war. On top of all that loomed a more familiar issue: members’ defence budgets.

Western defence spending fell dramatically in real terms after the cold war. America’s expenditure went from 6% of GDP in 1989 to around 3% a decade later; that of European countries went even lower. In 2006 NATO allies agreed to a target for defence spending of 2% of GDP, with 20% of that budget going on military equipment. Russia’s aggression against Ukraine in 2014, involving the annexation of Crimea and a separatist war in the Donbas, provided a jolt to meet the target: that year NATO members agreed to “aim to move towards” the 2% guideline by 2024. Still, many European powers lagged behind, to the annoyance of America.

The full-scale invasion in 2022 provided another wake-up call. The 2% target has become a floor, rather than a target. The final communiqué in Vilnius stated that “in many cases” spending beyond 2% of GDP would be needed and reaffirmed allies’ commitment to devote at least 20% of defence budgets to military equipment. The alliance’s estimates for 2023 suggest that just 11 of its 31 members will meet both targets (see chart one).

That is an improvement. In 2014 just three allies did so; seven did in 2022. Germany is expected to get there in 2024; France in 2025. The International Institute for Strategic Studies (IISS), a think-tank in London, has said that around 20 European countries pledged to increase defence spending after last year’s invasion. Italy and Norway have said they will meet the 2% figure by 2028; Denmark by 2033. They all lag far behind countries like Poland, which is on course to devote nearly 4% of GDP to defence this year, and the Baltic states, which are also rapidly increasing their budgets (see chart two).

The IISS estimates that, if all promises are kept, the average level of defence expenditure among NATO’s European members will be 1.8-1.9% of GDP by 2032, compared with 1.6% in 2022 and 1.3% in 2014. Yet the challenge for NATO members lies not only in boosting spending, but also in deciding precisely how to invest in order to support Ukraine, maintain their own stockpiles and resource the alliance’s new plans to defend Europe.

NATO officials emphasise the need for warfighting capabilities like heavy armoured brigades and air- and missile-defence systems. Those preferences reflect the lessons from Ukraine, where old-fashioned artillery has played a crucial role and manoeuvering without armour has proven costly. But they are also areas where many European armies fare poorly. Most European countries could probably field no more than one full-strength brigade, according to some NATO estimates. That would seem bewildering to any cold-war general. To meet the alliance’s needs, European members will have to invest quickly—and wisely.■

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NATO defence spending is rising, but not fast enough - The Economist
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