After berating NATO allies over military spending in Brussels, U.S. President Donald Trump declared victory at the G7 summit in Sicily.
But his pronouncement that money had begun to “pour in” only confirmed to allies that Trump, even after his visit to NATO headquarters, still didn’t have a clue about how the alliance’s financing actually works.
If he understood the system, Trump#would know that relatively little money ever pours in to NATO. And when it comes to the money that does go directly into NATO coffers, there is a strict cost-sharing formula — and allies are all paying their share.
Should allies decide to meet Trump’s demand for increased military spending, the money will never pour in. On the contrary, it is supposed to pour out, with individual NATO members spending more money on their own military forces, equipment and weapons.
Here’s a simple primer on how NATO’s direct budget (officially known as “common funding”) works, and who’s paying what share. We’ll even use bullet points in the hope that a certain someone in the White House might pay 2 percent of attention.
NATO’s “common funding” budget, the part of the alliance budget controlled by its#international civilian and military staff, is divided into three#main categories:
• Civil Budget
• Military Budget
• NATO Security Investment Programme (for capital expenditures)
As NATO explains, “These are the only funds where NATO authorities identify the requirements and set the priorities in line with overarching Alliance objectives and priorities.”
Allies provide money for these three budget categories according to a two-year cost-sharing formula, based on each ally’s gross national income, meaning the wealthier members pay a proportionally bigger share.
According to the formula for 2016 and 2017 —the United States pays 22.14 percent (rounded to two decimal places; NATO is even more specific on its website). Germany, which has been castigated by Trump, is the next biggest contributor, paying 14.65 percent, followed by France, which pays 10.63 percent, and the United Kingdom, which pays 9.85 percent.
For 2017, NATO’s total budget is roughly €2.18 billion, or $2.44#billion, divided as follows:
• Civil Budget: €234.4 million, or $262 million
• Military Budget: €1.29 billion, or $1.44 billion
• NATO Security Investment Programme: maximum of €655 million or $734 million
From here on, let’s keep the figures in U.S. dollars, just so it’s easier to follow in Washington.
According to the cost-sharing formula, the approximate total share of the wealthiest major allies (presuming NATO spends the maximum allowed on capital investments) for 2017 is:
• U.S. $540.32 million
• Germany $357.46 million
• France $259.46 million
• U.K. $240.3 million
On a per capita basis, that means Americans are paying far less than Germans, roughly $1.68 per person for the 2017 NATO budget. On a per capita basis, Germans are paying more than 2.5 times as much: $4.39 per person. (By this same math, the French are paying $3.88 per person, and Britons $3.69 per person.)
Of course, Trump’s point (and to be fair it’s the same point as many of his predecessors in the White House) is that the important spending by NATO allies is not on the relatively small annual budget for headquarters, but on the soldiers, weapons, equipment and other capabilities that give the alliance its great military might.
On that score, U.S. spending dwarfs that of all other allies. The U.S. forks out more than $600 billion a year on its military compared to about $40 billion spent by Germany.
At NATO headquarters, there is a general sense that Trump doesn’t quite grasp how NATO funding works, though some officials leave open the possibility that he is deliberately simplifying his comments.
At the same time, no one in NATO leadership wants to criticize Trump because they agree with his overarching goal — even if he doesn’t quite understand the goal himself.
In 2014, NATO allies pledged to work toward spending at least 2 percent of annual GDP on defense, a target currently met by the U.S. and just four other countries: Greece, Estonia, the U.K. and Poland.
The pledge in 2014 was voluntary and the alliance set no consequences for countries that fail to meet the target. In response to Trump’s pressure, NATO Secretary-General Jens Stoltenberg convinced allies not meeting the 2 percent GDP target to agree to develop, by the end of this year, national plans showing how they would do so.
In Germany’s case, meeting the 2 percent GDP target would require nearly doubling its annual military spending to roughly $70 billion from $40 billion.
But even if German officials, who have pushed back on Trump’s demands, agreed to such a sharp increase, that spending would be on Germany’s own national capabilities, which could be shared with NATO — if Germany wanted to do so. Under no circumstance, however, would that money ever “pour in” to NATO.
When Trump talks about pushing for 2 percent of GDP in spending, his comments suggest that money would automatically fill the alliance’s coffers, something that officials at NATO headquarters acknowledge is a mistaken impression — if, in fact, that’s what Trump believes.
“That would be national defense budgets, any portion of which could be contributed to NATO but that would be a national decision based on operational requirements,” a senior official said, describing the potential 2 percent of GDP in spending.
That the U.S. spends far more than 2 percent of GDP on its own military is a sovereign decision that reflects its unique role as the world’s only superpower.
“It’s also about the US’s global reach and global responsibilities,” the NATO official said. “Because the U.S. has this global reach and global responsibility then of course the military defense expenditures are going to be very different from a country like Slovenia or Luxembourg.”
Anyone interested in learning more about NATO funding — perhaps during a break from covfefe memes on Twitter — can find more detailed information on the alliance website.
Originally Posted by Azor
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