NATO’s Spending Boost Is Nothing for Trump to Celebrate

(Bloomberg Opinion) -- President Donald Trump has helped prod his North Atlantic Treaty Organization allies to increase military spending by $100 billion since he came to power, or so Secretary General Jens Stoltenberg says. But a look beyond the headline number suggests the president’s demands have resulted in cunning Trump-pleasing tactics rather than stronger defenses.

It’s undeniable that NATO defense expenditure increased in the two years since 2016, rising by a total of $101.7 billion, according to data collected by the organization. That, however, includes U.S. and Canadian spending.

Look deeper, and it becomes clear that Trump’s threats to pull the U.S. out of the alliance haven’t resulted in a disproportionate increase in Europe’s defense outlay. The continent's NATO members boosted their spending by $47.8 billion. That’s about 47 percent of the total increase, even though they account for 49.4 percent of the alliance membership’s total gross domestic product. Using constant 2010 prices and exchange rates, Europe’s contribution to spending growth comes to 51.2 percent.

The breakdown reveals how Trump’s rhetoric really affects his allies. The countries that dedicated the biggest share of their GDP growth in 2017 and 2018 to increasing defense expenditure are tiny. Of the top five spenders on this measure, three have some of the smallest armed forces in the alliance.

The smallest and militarily weakest NATO members have a strong incentive to take Trump’s demands seriously. With conservative voices in the U.S., notably Fox News host Tucker Carlson, openly doubting that the U.S. should provide a security umbrella to countries like Estonia or Montenegro, they need to stay on Trump’s good side. If the U.S. president wants them to buy insurance by boosting military spending, they will do so.

It is doubtful, however, that this will lead to any serious increase in NATO’s combat readiness. None of the small member states will ever be able to defend themselves successfully against any hypothetical Russian aggression.

The other, and perhaps more important, problem with Europe’s increased contribution is that much of it hasn’t gone toward boosting NATO’s combat readiness. Though the combined number of service personnel in NATO countries has increased by about 2.7 percent since 2016, costs related to military staff climbed by 5.1 percent. The latter figure includes items like pensions.

In the U.S., only 8.5 percent of the increase in total military expenditure went toward personnel expenses. In the U.K., the figure was almost 70 percent. In France and Germany, it was 41 percent. At the same time, none of these three big military powers has increased the size of their armed forces by much; in fact, France has even cut its slightly.

There’s nothing wrong with paying service members and veterans more. But counting that as an improvement in NATO burden sharing seems a stretch. 

The ever-diplomatic Stoltenberg, now set to become the second-longest serving secretary general, knows Trump’s passion for big top-line numbers and his contempt for detail. The breakdown of NATO’s Trump-era spending boost doesn’t appear on the president’s radar, and Stoltenberg is happy to keep it this way so he can acknowledge Trump’s success in securing this boost.

He would be well-advised, however, to point out gently to the president that he is picking the wrong targets when he criticizes other members. Germany is a convenient scapegoat because it will spend just 1.2 percent of GDP on defense in 2019, well below NATO’s agreed target of 2 percent. But in absolute terms, Germany provided the biggest spending increase in the last two years after the U.S. itself, adding $9.4 billion, almost 20 percent of the boost from Europe.

In his repeated criticism of Germany, Trump is, again, reacting to the headline number and to the combative statements of the Social Democrats, junior partners in the country’s ruling coalition. For them, keeping defense expenditure down is a matter of standing up to Trump, a major element of the party’s foreign policy stance. But Chancellor Angela Merkel and her Christian Democrats are in fact serious about pulling their weight in the alliance.

Trump should, perhaps, be more worried about Turkey, the country with the second-biggest military in the alliance. It devoted the smallest proportion of its two-year increase in GDP to defense relative to all other NATO members. An increasingly independent military power in the Middle East, it will be a far more problematic ally for the U.S. than Germany – despite the latter’s seeming inability to flatter Trump enough to keep out of his cross-hairs.

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.

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