NATO Spending A Military Upgrade to Please America?

The fact that Donald Trump wants Germany to spend more money on its military has become an election campaign issue. But would increasing the defense budget really be the best move?
German Defense Minister Ursula von der Leyen with U.S. Defense Secretary James Mattis at the Pentagon earlier this month.

There is a number haunting Berlin’s political elite, and it’s a number that all those who want to win the federal elections in the fall would prefer to keep quiet: 75 billion.

That is how much, in euros, Germany would have to spend in 2024 for its defense; for tanks and fighter jets, for soldiers on maneuver and operations abroad, for reconnaissance and cyber defense. Currently the figure is around €36 billion. Whoever promises German voters in an election year to more than double the defense budget within seven years can start getting used to the idea of sitting on the opposition benches. Which is why the center-right Christian Democrats and the center-left Social Democrats now have a problem.

They only have themselves to blame. At their summit in Wales in 2014, in the wake of Russia’s annexation of Crimea, NATO member states declared a loose commitment made in 2002 to a mandatory target, namely that each country is to spend 2 percent of its gross domestic product on defense in the future. A transitional period of 10 years was agreed upon.

Currently, Germany is investing 1.2 percent of its GDP in Defense Minister Ursula von der Leyen’s budget, making it 16th in the ranking of the 28 NATO states. If it were to stick to its pledge it would mean – given an economic growth averaging 2 percent per year – the defense budget would balloon to €75 billion by 2024. The open secret is that no one has any intention of keeping that promise.

For most NATO countries, the target agreed upon in 2014 is purely symbolic. The Europeans responded to the urging of then U.S. President Barack Obama to finally spend more money on defense with a spirited “Sure thing!” before shelving it. This “let’s think about it” attitude came to an abrupt end with the change in the White House. Donald Trump’s threat that the United States will only protect those who pay their fair share sent shockwaves through the German government.

Ms. Von der Leyen wants to dissuade the new U.S. government from it fixation on GDP – and coax it into a debate on efficiency.

The CDU and SPD may be pursuing the same goal of wanting to pay significantly less than 2 percent of GDP in the future despite the commitment in Wales, but they have differing strategies for explaining it. The Social Democrats want to make Mr. Trump see that security isn’t measured via the prism of the defense budget alone. The CDU, on the other hand, wants to offer more military efficiency in place of more money. The chancellor, the true Grand Coalitionist that she is, argues in both directions.

Foreign Minister Sigmar Gabriel let it be known last weekend that he considers “the exclusive concentration on the defense budget” to be wrong. Germany, he pointed out, is spending more on development aid than other NATO states – and “€30-40 billion a year for the integration of refugees.” The message is that these funds are also to be considered security costs. Angela Merkel has made similar observations. She wants to see spending for “development aid and crisis prevention” taken into account.

Ursula von der Leyen is taking a different tack. She has never been a fan of the 2 percent goal, which she made clear during several trips to the United States.  Only five of the 28 NATO states are currently meeting this guideline. They are, besides the U.S., Great Britain, Lithuania, Poland, and Greece. Ms. von der Leyen considers it absurd that Greece is being held up to Germany as a role model. The only reason the Greeks are meeting their 2 percent of the GDP commitment is because their economy has massively collapsed. Germany, on the other hand, has been growing robustly for years and its defense spending has consistently increased in absolute numbers. Greece’s has plummeted. 1.2 percent of a whole lot is, after all, more than 2.4 percent of very little.

20 p4 NATO in Numbers-01

Other odd discrepancies are bothering the German defense ministry. The German military is strongly geared toward NATO requirements, and thus orientated toward the alliance. Other armies – including those of the United States, France and Great Britain – are significantly less so. Their budgets are primarily concerned with national interests and only after that the collective defense. Moreover, comparing defense budgets only works to a certain degree anyway. In France, for example, all the costs for the gendarmerie and firefighting come under the defense department.

Ms. von der Leyen had nevertheless signaled a willingness to make concessions at the Munich Security Conference last weekend. She wants to win time. A plan is now supposed to be worked out by the end of the year on how to reach the 2 percent target.  For starters, Ms. von der Leyen can point to the fact that the German defense budget is once again being increased, after a long period when that was not the case. By 2030, the German military, the Bundeswehr, will invest €130 billion in armament projects.

Ms. Von der Leyen wants to dissuade the new U.S. government from it fixation on GDP – and coax it into a debate on efficiency. Her thinking: If we more strongly interlink the national armies in Europe, we can save money and put that money toward modernizing the armies, then the Americans would also have to be satisfied. After all, their ultimate aim also isn’t more money in the system but more strike capability.

In fact, it is a valid question whether the 28 NATO states are not already spending more than enough money on their military, particularly compared to Russia. Added together, last year’s defense budgets of the NATO members were, depending on how they were calculated, between the $820 billion and considerably more than $900 billion. Russia doesn’t spend a tenth as much money on its military. It was about $66 billion in 2016. It is primarily the German far-left Left Party that is continually pointing out these numbers. For that reason, upgrading the military would be “insanity,” according to the party’s parliamentary leader, Sahra Wagenknecht.

NATO leaders at the 2014 Wales summit.

However, to put that comparison into perspective, the NATO states are protecting at least 930 million people and Russia only 144 million. However, the costs comparison creates a distorted image for another important reason. “Collectively, Europe is the world’s second largest military spender. But it is far from being the second largest military power,” the European Commission’s former special advisor on defense and security policy, Michel Barnier, argued in June 2015. The tenor of his criticism of Europe’s military integration: that we are creating a lot of idiocy. When the European Union’s individual nations would each rather develop and build their own trucks, tanks and rockets instead of establishing E.U. models, they shouldn’t be surprised when military spending remains bizarrely high.

According to the Barnier report, in 2013, 90 percent of all armament development programs and 84 percent of all procurement programs within the European Union were limited to the national level. A couple of graphic examples: Europe has 17 different types of combat tanks. The U.S. Army suffices with one kind. Europe maintains 20 types of fighter aircraft. The U.S. has 11. The number of types of destroyers and frigates: E.U. 29, U.S. four. As a result, an Italian study on Europe’s efficiency as a military power came to the conclusion that it costs €310,000 more to deploy an E.U. soldier abroad than an American soldier.

This is not only the cost of rampant economic egoism but also of the variety of security policy cultures within Europe. While in Germany every military operation, even when based on an E.U. resolution, must be approved by the Bundestag, the French president has a free hand in deploying soldiers. That also explains the reluctance to grow together. There are limits to just how much a parliamentary army and a presidential army can be merged.

The Russian and the Chinese armament policies are free of such ancillary political costs. That’s why every ruble and every yen going toward the military buys more firepower than every euro. Part of an honest comparison is that the Putin government maintains its level of military spending at 4-5 percent of its GDP. Between 2005 and 2014, the Russian military budget grew by 97 percent, while the combined budget of the E.U. states fell by 9 percent.

Although Russian spending has greatly dropped in the meantime, it wasn’t because this was politically desired but rather it was due to two other developments. For one, the price of oil collapsed, which resulted in a 60 percent decrease in the value of the ruble against the euro. For another, because of the war they instigated in Ukraine, the Russians lost vital suppliers from there – and, due to the sanctions, others from the E.U. And finally, it isn’t the nominal budget that indicates who is threatening whom but rather the actual actions.


This article first appeared in Die Zeit, a sister publication of Handelsblatt. To contact the authors: [email protected]