Ahead of NATO summit, allies remain divided about common funding

NATO Secretary-General Jens Stoltenberg in Brussels, Belgium, 01 June 2021. [EPA-EFE/JOHANNA GERON]

Shortly before a crucial summit on 14 June in Brussels, NATO members remain divided about a proposal for higher community spending.

At the summit, touted as an opportunity to revive the alliance and a reset when US President Joe Biden visits Brussels in June, NATO leaders are expected to launch an update of the alliance’s decade-old strategic concept, outlining NATO’s objectives and key security tasks with an eye toward 2030.

According to NATO diplomats, the contents of the reform report are a ‘riposte’ to Macron’s allegations of ‘brain-dead’ and response to ‘legitimate criticism’ over the alliance’s slow adaptation to the future.

NATO Secretary-General Jens Stoltenberg proposed in February that allies put more money directly into existing, small common budgets to fund collectively more of their deterrent operations on allied territory, rather than the current system in which a member bears all the costs of a single deployment.

This would apply, for example, when members participate in the stationing of troops in the Baltic States or air surveillance missions.

Another idea is that allies could invest in upgrading allied bases to adapt to climate change, protecting telecoms and computer networks against cyberattackers and in space.

“Spending together is a force multiplier, it’s an efficient way of spending, and it also sends a very clear message to our own populations, and to any potential adversaries – and then, of course, spending together is a way to invest in the bond between Europe and North America,” Stoltenberg told reporters on Tuesday (1 June) after a meeting of NATO foreign and defence ministers in Brussels.

According to him, with more money in the joint alliance budget, NATO’s missile and air defence could be improved.

In its current state, NATO’s common-funded budgets amount to 0.3% of total allied defence spending, around €2.6 billion a year, and are used to finance civil and military personnel in the alliance’s headquarters, the command structure and joint military infrastructure such as the AWACS reconnaissance aircraft.

According to the current distribution key, Germany and the US bear the largest share of NATO’s community costs, with both countries contributing around 16.4% each. The key was recently revised to accommodate former US President Donald Trump, which increased the German community budget share.

“The vast majority of defence spending will still come from the national defence budgets,” Stoltenberg said, referring to each alliance members’ spending goal of 2% GDP for their own defence.

Although the COVID-19 pandemic has massively reduced revenues of national governments in 2020, NATO allies significantly increased their military spending and eleven out of 30 alliance members reached the target of earmarking at least 2% of GDP for defence, according to NATO’s recent annual report.

US pressure brings about rise in NATO defence spending, despite pandemic

Although the COVID-19 pandemic has massively reduced revenues of national governments in 2020, NATO allies significantly increased their military spending and eleven out of 30 alliance members reached the target of earmarking at least 2% of GDP for defence, according to NATO’s annual report released on Tuesday (16 March).

The figures are particularly relevant to NATO because Washington has been calling for years for a more balanced burden-sharing within the alliance.

NATO sources told EURACTIV it will be crucial to see how defence spending will develop this year as the budget plans for 2020 had been drawn up before the COVID-19 pandemic hit.

However, it is now very likely that members will in principle declare their readiness at the summit towards the proposal to fund deterrence and defence measures at least partly from a community budget. How much it will grow will likely remain open for the time being.

NATO diplomats said other members are not yet convinced of the plans either and the summit with Biden may only agree to carry out an analysis of common funding.

France, which has for long advocated strengthening EU defence rather than NATO itself, stands sceptical towards the plans as it is unlikely to benefit French military priorities. France, the only EU nuclear power, already meets NATO’s 2% target on defence.

“All this money is money that won’t go toward increasing national budgets and a European defence effort that benefits NATO,” French Defence Minister Florence Parly recently told Politico, criticising that it was not yet clear what the money was for and if it should be spent at all.

In turn, Germany’s defence minister Annegret Kramp-Karrenbauer said she supports the plans.

“For us, it is very important that we strengthen our ability to act together, for example with more joint resources,” she said on Tuesday on the sidelines of discussions on the upcoming NATO summit, while German foreign minister Heiko Maas stressed the proposals for greater joint financing were a “step in the right direction“.

Can reform and refocus save 'brain dead' NATO?

NATO’s new reform report presented this week has drawn up recommendations on how the military alliance should tackle new challenges in its backyard. EURACTIV spoke to experts about the report and the next steps.

“We proposed changes to mitigate eventual internal …

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