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U.S. President Donald Trump meets with NATO Secretary General Jens Stoltenberg before the NATO summit in Watford, London, England, December 3, 2019.
Kevin Lamarque | Reuters
The thorny issue of NATO defense spending could soon return to the global spotlight as U.S. President Donald Trump looks to immediately address his biggest political and economic problems.
Trump’s relationship with Western military alliances was strained during his first term as president, with the Republican leader often lambasting NATO members for failing to adhere to a 2014 goal of spending at least 2% of GDP annually on defense.
Ahead of his second term, Trump said the debate over military spending – and his view that NATO members are too dependent on the United States for their own security – would be back on the agenda, adding that the 32-member alliance Should contribute more defensively.
“I think NATO should set (5% of its GDP as a NATO contribution target),” he said in January. “They can all afford it, but it should be 5%, not 2%,” he said at a press conference. He also refused to rule out using force to seize the Panama Canal or Greenland — Territory belonging to NATO member Denmark.
Defense spending by NATO members has increased significantly since Trump last took office. In 2018, at the height of White House leaders’ fury with the military bloc, only six member states even met the 2% GDP target.
In contrast, NATO data estimates 23 member states meet 2% target 2024. While some countries such as Poland, Estonia, the United States, Latvia and Greece exceed this threshold, major economic powers such as Canada, Spain and Italy are among the laggards below the payment threshold.
NATO members have yet to meet Trump’s 5% target, including Washington under his predecessor Joe Biden’s administration.
Polish President Andrzej Duda fully supports Trump’s call for more NATO spending, telling CNBC on Wednesday that it was ‘Most important’ is Europe’s return to Cold War-era defense spending Defense against countries like Russia and their expansionist foreign policy.
“If we want to withstand this – and we Poles decisively do so – our defense spending this year will be close to 5% of GDP. We realize that we must modernize our armed forces, we must be strong and “This is a real deterrent to Russian aggression,” he told CNBC’s Steve Sedgwick on the sidelines of the World Economic Forum in Davos, Switzerland, on Wednesday. “
Perhaps understandably, since Poland borders war-torn Ukraine, it spends the highest proportion of GDP on defense compared to other NATO members. NATO 2024 Estimates It shows that Warsaw spent 4.12% of its GDP on defense last year.
New leadership, old problems?
Former Dutch Prime Minister and current NATO Secretary-General Mark Rutte has only been in office for a few months, but he has repeatedly called on member states to increase defense spending.
However, he said his first priority was to get lagging countries to meet the 2% target.
“Fortunately, thanks to Trump in his first term, we increased defense spending … but we all have to get to 2%,” he told CNBC’s “History” at the World Economic Forum in Davos on Thursday. Steve Sedgwick said.
Rutte pointed out that countries that have not yet reached the necessary target “must reach 2% in the next few months. It must be done this year.” He himself has been criticized for Dutch defense spending chronically falling below NATO targets. experiences during his tenure.
Outgoing Dutch Prime Minister Mark Rutte speaks to the media on the first day of the 2023 NATO Summit in Vilnius, Lithuania, July 11, 2023.
Oded Andersen | Getty Images
Rutte said it was not impossible to increase defense contributions, saying European countries had the ability to cut pensions, health care and social security spending or increase taxes to increase defense spending.
“At the end of the day, this is a wealthy place and in Europe we have an incredible amount of wealth … so in terms of defense spending we can do that,” he said.
However, pressing domestic spending priorities have limited local governments’ ambitions to increase defense and security funding as European countries face high food and energy costs.
Dutch Prime Minister Dick Schoof told CNBC on Wednesday that spending 5% of the country’s GDP on defense is a tall order.
“I think it’s going to be very, very difficult. If I look at the impact of this increase, it’s almost impossible. I think the discussion about defense spending should also be negotiated and discussed from a strategic perspective. (We have to decide) what we want Working with NATO … and then deciding how much money we’re going to put in,” he told CNBC’s Dan Murphy.
spending limits
Swedish Finance Minister Elisabeth Svantsson said she must weigh the desire to increase defense spending with the need for economic growth, which has been a challenge across much of Europe.
“It’s a very heated discussion about how much (should be spent on defence), whether it’s 2 per cent (of GDP) or 5 per cent. But the question from my perspective is we have to do what we need to do Defending ourselves and having a strong NATO, but it’s also a question of growth,” she told CNBC’s Dan Murphy in Davos on Wednesday.
“I am finance minister… It depends on growth. First, we need growth in Europe, and then we need to know what we can do in terms of military spending,” she noted.
Sweden became NATO’s newest member in 2024 and last year announced plans to increase defense spending to 2.4% of GDP by 2025 and 2.6% of economic output by 2028.
Svantsson said Trump’s view that NATO members need to increase defense spending was “fair because we have to do more in Europe” but argued that some members were not even meeting the 2% target. , while NATO countries “have more and more defense spending.” Economies larger than Sweden’s need to do more.
Spain is a likely target of Trump’s wrath. European Commission Expected to expand by 3% Last year, Spain spent 1.28% of its GDP on security.
Spanish Prime Minister Pedro Sanchez defends Madrid’s recordHe told CNBC in Davos that the country has been working to increase defense spending.
He said on Wednesday: “Please be assured that Spain is very committed to achieving the goal of defense spending of 2% of GDP, but I would also like to say that in the past 10 years, our total defense spending has also increased by 70%.” “If we look at the numbers in absolute terms, we can say that Spain is the tenth-ranked country.th The largest contributor to NATO. “
