NATO’s Big Spender

For those interested in how NATO is funded, its website neatly outlines how “member countries contribute to NATO in accordance with an agreed cost-sharing formula based on Gross National Income.” Members are additionally responsible for funding their own armed forces, and for contributing to deployment costs when they are involved in a mission. All of this funding goes to an array of projects and departments that work to fulfill three main functions: civil obligations, military endeavors, and the NATO Security Investment Programme. The variation of member countries’ contributions are evident on the chart, but they only reveal the tip of the iceberg of how polarized spending currently is. On the NATO site, the chart shows how the United States comes in around 21-22 percent for all three sections of spending, with the closest follower, Germany, at 14 percent. France and the UK both take on around 11 percent of NATO spending, and Canada hovers around 5 percent across the board. What is this picture really showing us? Some might feel that because the US spending for defense has consistently been on the rise it makes sense for them to shoulder the majority of the budget. But the reality is that spending is more skewed than these indicators for 2012-2013 reveal.

In April, NATO’s Secretary General Anders F. Rassmussen penned a piece for Foreign Policy Magazine discussing the vital importance of European states increasing their defense spending. Specifically, he was referring to their contributions to NATO. NATO is not only struggling with funding, but will inevitably feel internal pressures from these inconsistencies if a shift of weight is not made soon.

“The biggest gap is between the United States and the other allies. Today, the United States represents 72 percent of total NATO defense spending, up from 63 percent in 2001.” The US’s defense budget has more than doubled since 2001 – but Rasmussen goes on to say that doesn’t justify their bearing the burden, because at the same time European defense budgets have either “stagnated or decreased,” making the discrepancies even more extreme.

With the US accountable for the majority of the costs of NATO defense, it’s no wonder that domestic politicians and civilians are skeptical about the organization. Rasmussen correctly notes “[t]his imbalance has rightly prompted… Americans…to wonder why they should continue to ‘subsidize’ Europe’s security if Europeans themselves appear unwilling to make the necessary investment.” As it is, channeling domestic support for international engagement is one of the most difficult things for politicians in the US to achieve. The realization that they are additionally footing the bill for Europe’s security will only further aggravate these sentiments.

With NATO’s largest mission ever coming to an end in Afghanistan, there is already a dialogue on what direction the multi-lateral organization should take next. One core component of this discussion will be the debate of whether or not the US’s investment in European security is worth it, at least on the level that currently exists. America might try finding ways to maintain its Atlantic alliances without the organization that is currently completely reliant on it for survival.

Considering that 2012 was the first time Asian defense spending “exceeded that of Europe in nominal terms,” Europe should probably recommit to its collaboration with the largest defense spender in the world. America is already focusing on its ‘pivot’ to Asia to strengthen global security in the region with the fastest military and economic growth, but that does not mean that the Atlantic Alliance will fall at this hand. New alliances do not mean the end of old ones – unless the old alliances are no longer committed. The question here is not whether America will transition out of the Atlantic; leaving one part of the world for another is not going to benefit the ultimate goal of global security. But what is necessary is for Europeans to commit to defense as Asia seems to be doing, to preserve the security benefits that they get from NATO.

Questions of whether NATO should expand or not are contingent on the perseverance of the organization, which is in turn contingent on the sustainability of its funding. United States funding to NATO is only possible for so long before an inevitable reevaluation of their investments occurs; the Europeans have a timeline to financially recommit to NATO. In the interim, they can demonstrate their commitments through NATO’s Smart Defense program. The program “encourages Allies to cooperate in developing, acquiring, and maintaining military capabilities,” which essentially means pooling resources more effectively, a strategy that is especially necessary during periods of economic hardship. The bottom line is that when Europeans manage to develop the funds, they should look at their security commitments as a priority if they want to keep NATO an effective partnership.

Radha Patel

About Radha Patel

Radha Patel completed her BA at McGill University, with a double major in Political Science and World Religions and a minor in Politics, Law, and Society. Her areas of interest include international relations, comparative politics, and transitions to democracy. Radha is interested in learning about Canada’s role on the international stage and how it can be optimized to be more effective in its global endeavours. She was the Program Editor as well as a Research Analyst for the Emerging Securities Program at the NATO Association of Canada.