Five Facts You Need to Know About NATO Defense Spending
The North Atlantic Treaty Organization (NATO) is one of the most powerful and successful military alliances in history. However, the organization hasn’t been without its controversies. At the center of many of these debates is the amount of money member countries have allocated to defense spending. Because NATO is a collective defense pact, it is essential that all member countries make adequate investments in their military and are ready and able to respond in the event of an attack against any one member country. This past week, debates over NATO spending came to a head when President Trump urged member countries to raise their target for annual defense spending from 2 percent to 4 percent of their GDP. Here are five facts you need to know about NATO history and defense spending:
1. NATO was established on April 4, 1949 as a political and military alliance among 29 North American and European countries. The organization was created as a response to increased Soviet aggression in the wake of World War II. Since the end of the Cold War in the late 20th century, NATO has taken action around the world to ensure the security of its members. One of the core tenets of NATO is Article 5, which states that an attack against one member of NATO is an attack against all members. The only time Article 5 has been invoked was following the 9/11 attack on the United States when NATO allies joined the U.S. in the “war on terror.”
2. The current benchmark for NATO member defense spending is 2 percent of a country’s GDP. At the 2014 summit in Wales, NATO leaders pledged to lift their defense spending to 2 percent of their country’s GDP by 2024. This decision came in response to imbalanced defense spending from member countries. At the time, only the U.S., United Kingdom, Greece, and Estonia spent at least 2 percent on defense. The remaining members spent less than 2 percent and eight countries allocated only 1 percent or less of their GDP to military spending. Despite this new agreement, by the end of 2017 only six countries — the U.S., U.K., Greece, Estonia, Romania, and Poland — met the 2 percent threshold. There is no penalty for not meeting the 2 percent mark.
3. Due to size of the American economy, the U.S. allocates the most money to defense spending. In 2017, the U.S. spent 3.58 percent of its GDP on defense. In terms of raw dollars, 3.58 percent of U.S. GDP translates to $685 billion. Measuring in raw dollars, the U.K. comes closest to the U.S. in defense spending. In the same period, the U.K. allocated $55 billion to defense (about 2.14 percent of its GDP).
4. U.S. defense spending has changed drastically over the years. While 3.58 percent of GDP may seem like a sizeable investment, the U.S. has allocated far more to defense in the past. Since 1960, the high-water mark for U.S. defense expenditure was in 1967, when it spent 8.75 percent of its GDP on defense. This can be attributed to tensions surrounding the Cold War and U.S. involvement in Vietnam. In fact, current U.S. defense spending is relatively low. The only time the U.S. spent a smaller percentage of its GDP on defense in the past 60 years was from 1998 to 2001.
5. President Trump is not the first American president to criticize the defense spending of NATO allies. President Trump has been perhaps the most outspoken president on the topic of defense spending, saying just last week “many countries are not paying what they should … and frankly, many countries owe us [the United States] a tremendous amount of money.” However, he is by no means the first president to criticize the spending of other NATO allies. In April 2016, then-President Barack Obama called out NATO allies, stating “I’ll be honest, sometimes Europe has been complacent about its own defense.” In 2008, then-President George Bush shared similar sentiments, saying “America believes if Europeans invest in their own defense, they will also be stronger and more capable when we deploy together.”
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