All you need to know about NATO funding…

Trump is right about the NATO reliance on the U.S.


Lot of chatter in the run-up to this week’s NATO meeting.

Trump says that the U.S. piggybanks of NATO’s funding.

MSM fact-checkers say that Trump is way off base.

So, who is right?


I did some digging and here’s what I found…


There are 3 main components to NATO support: (1) Direct “common funding” to support the headquarters and ongoing operations … illustrated on the map above  (2) National commitments to “form a combined Alliance capability” and (3) permanent troop deployments along NATO’s eastern flank

Here are details, taken directly from the NATO web site (which spells “defense” with a “c”)

Common funding arrangements are used to finance NATO’s principal budgets: the civil budget (NATO HQ running costs), the military budget (costs of the integrated Command Structure) and the NATO Security Investment Programme (military capabilities).

Within the principle of common funding, all 29 members contribute according to an agreed cost-share formula, based on Gross National Income, which represents a small percentage of each member’s defence budget.

Note: the U.S. share of the common budget is 20-25% … about $800 million annually.


Combined alliance capability:

Indirect – or national – contributions are the largest and come, for instance, when a member volunteers equipment or troops to a military operation and bears the costs of the decision to do so.

When the North Atlantic Council (NAC) unanimously decides to engage in an operation, there is no obligation for each and every country to contribute to the operation.

In all cases, contributions (i.e. troop deployments) are voluntary and vary in form and scale, from for instance a few soldiers to thousands of troops, and from armoured vehicles, naval vessels or helicopters to all forms of equipment or support, medical or other. These voluntary contributions are offered by individual Allies and are taken from their overall defence capability to form a combined Alliance capability.

Note: When U.S. forces are deployed on NATO missions, they do so as U.S. troops, not as NATO “blue hats”. NATO only reports the headcount for blue hat deployments


The 2% defense spending “guideline”

In 2006, NATO Defence Ministers agreed to commit a minimum of 2% of their Gross Domestic Product (GDP) to spending on defence. This guideline principally serves as an indicator of a country’s political will to contribute to the Alliance’s common defence efforts.

The combined wealth of the non-US Allies, measured in GDP, exceeds that of the United States. However, non-US Allies together spend less than half of what the United States spends on defence.

Today, the volume of the US defence expenditure effectively represents some 67 per cent of the defence spending of the Alliance as a whole … an over-reliance by the Alliance as a whole on the United States for the provision of essential capabilities, including for instance, in regard to intelligence, surveillance and reconnaissance; air-to-air refuelling; ballistic missile defence; and airborne electronic warfare.

The declining share of resources devoted to defence in many Allied countries have exacerbated this imbalance and also revealed growing asymmetries in capability among European Allies. France, Germany and the United Kingdom together represent more than 50 per cent of the non-US Allies defence spending, which creates another kind of over-reliance within Europe on a few capable European Allies.

In 2014, three Allies spent 2 per cent of GDP or more on defence; in 2018 eight (of the 29)are expected to meet or exceed this target and by 2024, a majority of Allies are expected to do so.

Note: Germany has declared that it will try to hit 1.5% by 2026.  Say, what?


Permanent troop deployments along NATO’s eastern flank

More precisely, permanent deployment of U.S. troops in Europe, mostly along the the eastern flank (think: Germany).

in 2016, the U.S had roughly 35,000 troops stationed in Germany and another 30,000 in Italy, Spain, and the UK. Source


Bottom line:

While the U.S. “only” contributes about a quarter of NATO’s “common funding”, it accounts for 2/3’s of the “overall defence capability of the Alliance as a whole”, and stations over 65,000 active-duty troops in Europe.

Put it all together and Trumps 80% number may be a tad high … but it’s directionally right.

And, the principle is clear: other NATO nations underspend on defense – resting assured that the U.S. will step and protect them … as we did in WW I, WW II and other engagements.

Their underspending on defense allows them to spend lavishly on social programs … and then lecture the U.S. for doing too little on social programs.

There’s the rub.


Follow on Twitter @KenHoma

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2 Responses to “All you need to know about NATO funding…”

  1. LosLobos Says:

    Or may be the US is overspending?

  2. NYT gets it half-right re: NATO | The Homa Files Says:

    […] Related post: All you need to know about NATO funding… […]

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