How to Fix NATO's Chronic Burden-Sharing Problem

July 6, 2016 Topic: Security Region: Europe Tags: NATOWarsaw SummitDefenseUnited StatesStrategy

How to Fix NATO's Chronic Burden-Sharing Problem

The Warsaw summit is only a beginning.

Moreover, NATO Secretary General Jens Stoltenberg recently stated that the defense spending of NATO members registered a small increase in 2015 for the first time following a long decline. Estimates for 2016 show a further increase, he said: a total uptick of roughly $3 billion (a small percentage of NATO’s total spending).

Nonetheless, only four European member states clearly meet the 2 percent threshold: Estonia, Greece, the United Kingdom and, most recently Poland, which announced plans to double the size of its army. (Turkey is somewhat near or at the 2 percent figure, depending on which data source is utilized.) Relatively low expenditures by Germany (1.18 percent) and Italy (1.31 percent) are significant burdens on the alliance.

And now, the consequences of Brexit for UK defense spending need to be considered. While it is still early, the potential economic consequences of withdrawal from the EU will probably put downward pressure on the UK’s GDP and fiscal posture. Hence, the UK’s ability to maintain even its current level of defense spending will likely be under stress.

Under the circumstances, European NATO’s defense spending will probably not change materially in the near term. First, the pledge to reach the 2 percent level in ten years affords considerable flexibility; countries need not rush to meet the deadline. Second, experiences with similar financial obligations in the EU suggest that countries are likely to honor this commitment in the breach.

Perhaps most significant, the sustained period of decline in NATO European defense spending reflects a long-term, secular trend toward debellicization—after centuries of warfare, Europe has turned its swords into plowshares. For reasons of history, culture and the like, most Europeans hold a more sanguine view of potential security threats. They are more comfortable with the use of the nonmilitary tools of statecraft to solve serious problems than with high-intensity military force (a position that effectively assumes the role of the United States as ultimate guarantor of the security of Europe).

If anything, Europeans also prefer their engagement in so-called Petersberg tasks—ranging from low-intensity war fighting to humanitarian assistance to stabilization and reconstruction—to high-intensity warfare. Only the eastern European countries contiguous to Russia are focused on rebuilding conventional military capabilities.

Moreover, even the renewed threats that Europe has faced in recent years—terrorist incidents such as the Paris bombings, massive migration and a resurgent Russia—do not appear to have materially changed attitudes toward defense spending or the use of force (except in eastern Europe).

Notably, a June 2016 Pew survey conducted in the ten large European NATO countries continues to reflect a strong public preference to solve problems through approaches other than the use of hard power. Indeed, despite governmental commitments, there is little appetite among European publics for increased defense spending. Specifically, public opinion in eight of the ten countries surveyed opposed increased defense spending, with only the people of Poland and the Netherlands favoring a boost. A majority of the public surveyed favor maintaining the same level of defense spending in France (52 percent) and Spain (52 percent), with strong pluralities having the same view in Germany (47 percent), Greece (47 percent) and Italy (45 percent).

The Consequences: Europe’s Likely Capability Trajectory. Even with a significant budget increase (which for the reasons stated is unlikely), Europe’s capability gaps will take years to address—it will take significant development work, substantial procurements and integration of new capabilities into its forces to meaningfully address its capability shortfalls.

Unfortunately, on a more realistic and less robust spending trajectory (even assuming some modest budget growth), Europe will not be able, in all likelihood, to sustain full spectrum military capabilities and will continue to atrophy as a collective force. As one study found, “NATO Europe will have neither the will nor the capability to maintain a multi-brigade expeditionary force over a long distance from Europe for a multiyear peace-enforcement mission.” Even the continued joint training and live exercises central to the credibility of NATO's reassurance and deterrence measures will become difficult to continue.

The wide disparity in U.S. and NATO European spending is even more stark when research and development spending is considered separately: the United States spends nearly eight times more on R & D than European NATO members (roughly $70 billion versus $9 billion), and has largely maintained its level of R & D spending through the sequestration period. The result is a significant and growing wedge in the technological capability of fielded forces over time, as the United States develops and deploys new, transformational capabilities utilized in tandem with new organizational constructs and operational approaches.

Of course, all of this is exacerbated by the fact that Europe has multiple militaries, each with its own acquisition systems and customers. The redundancies and other inefficiencies inherent in this situation mean that there is little ability for any increases in funding that do occur to be allocated rationally for the best uses.

The Burden-Sharing Conundrum. The persistent burden-sharing challenge inherent in these statistics cannot be denied. The United States continues to account for the lion’s share of NATO’s defense expenditures. In 2014, the European member states of the EU and NATO spent an average of 1.56 percent of GDP on defense. This amounts to $370 per capita—about €1.1 per person a day at a current exchange rate. In contrast, in 2014, the United States spent 3.5 percent of GDP on defense, or $2,051 per capita. That is about $5.60 (about €5.1) per American per day—about five times every European NATO and/or EU citizen.

To be sure, Europe does make important contributions that are not reflected in defense budgets, including national resilience against hybrid warfare, the soft-power Petersberg tools that the European Union commits to failed-state situations and the fact that some have spent significant resources deploying their troops in sub-Saharan Africa or as part of the anti-ISIS coalition.

Moreover, Europeans can argue that, because the United States is a superpower that has a broader global reach and set of interests than Europe, it is reasonable to expect Americans to bear a larger share of the collective security burden. Of course, Americans could contend that Europe bears some of the benefits of that U.S. defense investment in other regions.

Nonetheless, even accounting for European investments in other types of security and the different roles of Europe and the United States in global affairs, the burden-sharing deficit is a serious issue. The contribution being made to national security per person across Europe is very low and creates an embarrassing transatlantic imbalance—one that European publics and their leaders should seriously consider. As Secretary of Defense Ashton Carter recently stated, the United States is doing “more than our fair share.”

Nobody is seriously arguing that Europe invest the same or similar amount in defense as the United States. But if Europeans could be convinced to spend just an average of just 25 euro cents more per citizen per day, all of Europe would be well over 2 percent of GDP on average for defense (which would still be less than 25 percent of the U.S. level in absolute terms).

In short, this division of labor, with the United States remaining responsible for the bulk of the military burden and Europe not meaningfully addressing this concern, is not politically sustainable. The focus on burden sharing during this year’s U.S. presidential election is not an accident and should be viewed as something of a “shot across the bow.”

Both historically and today, there has been strong public support for U.S. participation in NATO. 77 percent of Americans believe that being a member of NATO is good for the United States, according to a May 2016 Pew survey. However, this political consensus could unravel as Americans increasingly ask why Europe does not pay more of the security bill.

The U.S. concerns over burden sharing have grown and have been raised time and again within NATO in recent years—Secretary Gates complained about this during the NATO operation in Libya. The issue can be expected to continue to strike a political chord and become increasingly central in the future.

The sobering Brexit vote by the UK highlights the degree to which populist impulses from either side of the aisle could seize on this issue. Some may consider that European free riding is draining U.S. resources that could be used for domestic needs, while others who are more fiscally-minded might prefer to reduce the U.S. contribution in order to reign in overall U.S. spending.

Thus, in the absence of strategic action to address the ends-means mismatch, it is not far-fetched to consider that some future U.S. candidate or elected leader might seek a tax on European imports to address the security cost deficit. American political leaders who favor U.S. engagement in NATO may not be able to protect against this logic in the years to come.

3. Building NATO Coalition Capabilities and Interoperability: A Shared Responsibility

In fairness, our NATO European allies do not bear all of the responsibility for the atrophying of their capabilities and, ultimately, our combined NATO capability for coalition warfare.