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"Germany owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!"
Donald Trump - 18 March 2017

"Many NATO countries have agreed to step up payments considerably, as they should. Money is beginning to pour in - NATO will be much stronger."
Donald J. Trump - 27 May 2017

NATO - Defense Spending

NATO's collective agreement in 2014 was for its 28 member countries to spend at least 2 percent of their gross domestic product on defense spending by 2024. By 2017 only Britain, Estonia, Greece, Poland, and the United States were doing so.

All efforts to build up NATO conventional forces to adequate levels failed. The Lisbon goal of 1952, which envisioned the creation of 96 divisions in 2 years, fell far short of the mark. Although the adoption of the flexible response doctrine in the 1960s called for a boost in conventional strength, the plan's force requirements were never achieved. In the late 1970s, NATO allies agreed to a 3 percent per annum increase in defense spending, but this was slowed by a recession. On 18 March 2017 Trump reiterated his claim that member states do not contribute the required share. Many nations owe vast sums of money from past years and it is very unfair to the United States, he said. These nations must pay what they owe. Trump asserted the United States must be paid more for the powerful, and very expensive, defense it provides to Germany. Germany currently spends 1.2 percent of GDP and remains reticent on defense matters due to its wartime past.

Ivo Daalder, the US permanent representative to NATO from 2009 to 2013, responded to Trump: Sorry, Mr President, thats not how NATO works, he wrote. The US decides for itself how much it contributes to defending NATO. This is not a financial transaction, where NATO countries pay the US to defend them. It is part of our treaty commitment.

All NATO countries, including Germany, have committed to spend 2 percent of GDP on defense by 2024. So far five of 28 NATO countries do. Those who currently dont spend 2 percent of their GDP on defense are now increasing their defense budgets, he said.

Germany's Foreign Minister Sigmar Gabriel also hit back at Trump's comments. "A sensible security policy is not just buying tanks, driving defense spending to insane heights, and escalating the arms race... A reasonable policy means crisis prevention, stabilization of weak states, economic development and the fight against hunger, climate change and water scarcity."

U.S. Defense Secretary Jim Mattis told NATO member countries 15 February 2017 they must increase defense spending by the end of the year or the U.S. might "moderate its commitment" to the alliance. Mattis said NATO must agree on a plan that would see governments increase military spending to 2 percent of GDP. "No longer can the American taxpayer carry a disproportionate share of the defense of Western values," Mattis said. "If your nations do not want to see America moderate its commitment to this alliance, each of your capitals needs to show support for our common defense."

During the presidential campaing, Trump called NATO "obselete," and he has also suggested the United States might not continue to contribute as much to the alliance if other members did not pitch in more funding. Since taking office on 20 January 2017, Trump has been less critical of NATO, although he has continued to criticize some member nations for failing to make "full and proper financial contributions" to the alliance.

With the exception of the United States and Britain, only three other nations - Estonia, Poland, and Greece - meet the threshold. German Defense Minister Ursula von der Leyen said Washington was making a fair demand and called on Germany to increase its defense spending.

In 2006, the NATO Allies agreed to commit a minimum of two per cent, as a percentage of GDP, to spending on defence. The United States spends well over 3 percent, even with recent budget cuts. Many American taxpayers feel that the European allies and partners are getting a free ride. NATOs members account for more than half the worlds gross domestic product and collectively spend nearly $1 trillion on defense. This spending level dwarfs that of any possible opponent or combination of opponents. But given declining European budgets and the fact that the United States represents nearly three-quarters of NATOs defense spending, the current model unbalanced and sustainable over time.

NATO Allies also agreed that at least 20 per cent of defence expenditures should be devoted to major equipment spending,3 a crucial indicator for the pace of modernisation. In 2012 only five Allies spent more than 20 per cent of their defence budgets on major equipment expenditure; among the 22 Allies that spent under 20 per cent in critical investment in future capabilities, nine Allies spent less than ten per cent. The investment across the Alliance as a whole in major equipment has risen from 2003 to 2012, mainly as a result of increases in spending by the United States.

The result of these disparities in investment is two-fold: an ever greater military reliance on the United States, and growing asymmetries in capability among European Allies. This has the potential to undermine Alliance solidarity and puts at risk the ability of the European Allies to act without the involvement of the United States. Cuts in European equipment procurement could also weaken Europes defense.

NATO has turned into a two-tiered alliance where some members are willing to do the soft tasks and others the hard combat missions. While France, Germany and the United Kingdom together represent more than 50 per cent of the non- US Allies defence spending, more recently their defence spending has come under increasing pressure. The share of the other European Allies together fell from 8.8 to 7.5 per cent.

The combined wealth of the non-US Allies, measured in Gross Domestic Product (GDP), exceeds that of the United States. However, non-US Allies together spend less than half of what the United States spends on defence, and in the decade since 2001 the year of the 9/11 terrorist attacks in the United States their annual increases in defence spending have been significantly less. Since 2008, defence spending by most non-US Allies has declined steadily.

The allocation of burdens and responsibilities within NATO hasbeen a contentious issue since the formation of the alliance. In the 1980s deficits in the US current account and the federal budget moved the burden-sharing issue to the front burner of American politics: many Americans believed that US economic problems resulted from or were exacerbated by the spending burden assumed by the United States for the defense of Western Europe. By thelate 1980s the U.S. spent 6.5 percent of its gross national product on defense, Britain was next highest at 4.8 percent, more thana quarter below the .. level. Germany spent 3.2 percent; Denmark and Canada came up with a mere 2 percent each.

Allies should hold the line on defence spending and look for ways to close the gaps in their capabilities, NATO Secretary General Anders Fogh Rasmussen said as he launched his second Annual Report on 31 January 2013. Overall, NATO investment in modern capabilities has risen in recent years, and most Allies have significantly improved their ability to deploy and sustain forces. However, the development has been uneven, and while total defence spending by the Allies has been going down, the defence spending of emerging powers has been going up. If these trends continue, we could face serious gaps that would place NATOs military capacity and political credibility at risk, Mr Fogh Rasmussen stressed.

The Alliance faced three tasks, the Secretary General said. The first is to hold the line on defence investment: there is a lower limit of how little we can spend on defence, while living up to our responsibilities. The second is to start closing the gaps, as our economies start to recover. And the third is to build our strength in depth, he said. "Hard power will remain essential if we want to keep our populations safe and retain our global influence. This is why NATO Allies must hold the line on defence spending in 2013. We must also do more to get the most out of the funds and resources that we do have; multinational solutions will be vital for minimising our costs and our Alliance will be vital for maximising our capabilities. Then, as soon as our economies improve, we should consider increasing our investment in defence so that we can close the gaps."

NATO must have a sustained presence in countries that feel vulnerable to Russia, US President Barack Obama said 26 March 2014 at a meeting with EU leaders in Brussels. He added that neither Ukraine nor Georgia was currently being considered for NATO membership. Obama insisted that contingency plans had to be examined and updated to guarantee that we do more to ensure that a regular NATO presence among some of these states that may feel vulnerable is executed. However, Obama expressed concern that defense spending in Europe had fallen in several countries across the continent. If we have collective defense it means everyone has to chip in, and I have concern about diminished efforts by some in NATO, he said. Our freedom isn't free, he said, adding that it was necessary to pay for the assets, the personnel, the training... for deterrent force.

Decreasing defense investments in Europe further enlarges the asymmetry of defence effectiveness and military capabilities between the USA and its European allies. Reductions in defense budgets also imply the risk of weakening interests to maintain a strong transatlantic defense link from the American perspective. While once the USA covered 50 percent of total NATO defense expenditures, its share has increased to nearly 75 percent today.

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