President-elect Donald Trump’s campaign rhetoric about America’s allies has raised serious questions about the future of NATO. In many ways, the case for a robust transatlantic alliance is stronger than ever. Together, the rise of renewed Russian aggression, transnational threats, cybersecurity concerns, and humanitarian crises have shaped a security environment that demands cooperation between the United States and Europe. Given recent events on both sides of the Atlantic, however, it is important to reaffirm both the need for and the nature of the transatlantic alliance.
Initially created as a counterweight to Soviet aggression, NATO has had to adapt to a post-Cold War world by reinventing its mission, goals, operations, and structure. In the past twenty years, the alliance has evolved to meet new threats and extended its presence beyond traditional borders. In doing so, NATO has served as the cornerstone of peace and security in Europe for the better part of a century.
Despite its evolution and success, NATO continues to face questions about its relevance and usefulness in the United States and Europe. At the same time, fiscal insecurity, budget cuts, and austerity measures have constrained defense spending on both sides of the Atlantic, further complicating questions about the future of the alliance.
Charges from President-elect Trump that America’s allies are not “paying their fair share” and have not “fulfilled their obligations” cut to the heart of the nature of the transatlantic alliance. The President-elect further asserted that if NATO members do not meet their military spending goals, the United States “must be prepared to let these countries defend themselves.”
Questions of burden-sharing among allies are important, and NATO members should continue to work toward meeting the goal of spending 2 percent of GDP on defense. Only five of NATO’s 28 members currently spend at least 2 percent of GDP on defense. The United States spends the highest percentage of its GDP on defense, at 3.6 percent. In Europe, Greece spends 2.4 percent, Poland spends 2.2 percent, the United Kingdom spends 2.1 percent, and Estonia spends 2.0 percent.
In recent months, many governments have reconsidered spending priorities in light of emerging threats to European security. As a result, total European defense spending has actually increased by an average of 8.3 percent in the past year. Central and European states on Russia’s doorstep have primarily fueled this increase, boosting their regional defense spending by 19.9 percent. These are encouraging trendlines that bring the promise of greater burden-sharing within the transatlantic alliance.
When considering alliance burden-sharing, however, it is also important to understand the difference between a country’s defense spending and its NATO contributions. The 2 percent pledge is a target for defense spending within the country’s domestic budget and does not refer to a member’s NATO contribution. NATO determines each member’s cost-share contribution using proportional ratios based on the size of a country’s GDP. The countries that financially contribute most to NATO are those with the largest economies, first and foremost the United States. Although the cost-share ratios provide a clearer picture of burden-sharing by member states, the formulas do not account for the diversity of contributions that countries provide to NATO activities. These contributions can come in many forms, including troops, aircraft, and sea vessels in addition to monetary contributions.
Therefore, the 2 percent pledge cannot provide a complete picture of a country’s contribution to NATO funds or activities. It is, however, useful for assessing a country’s threat perception and its commitment to collective security. It is also helpful as a benchmark goal for further strengthening the alliance.
Finally, it is imperative to distinguish between the NATO treaty obligation for collective defense and the membership goal of spending 2 percent of GDP on defense. Alliances are not merely about dollars and cents—they are about strategy and statecraft. NATO members do not buy their way into the alliance by spending 2 percent of GDP on defense. The organization existed for over 50 years before its members collectively pledged to work toward increased defense spending. The 2 percent goal is just that, not a membership requirement and certainly not a condition of collective defense.
In the face of a revanchist Russia, a weakened European Union, and the increasing threat of extremism at home and abroad, cooperation between the United States and Europe has never been more necessary. While NATO does have fiscal challenges, the policy prescription to simply abandon this important alliance is misguided. NATO remains an indispensable mechanism for guaranteeing transatlantic stability and security. To that end, increases in European defense spending would demonstrate a stronger commitment to collective security, embolden the alliance, and ultimately lead to a more responsive security environment.