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Who's paying?

Bernd Riegert / bk
September 6, 2014

New strategies, more deterence, more soldiers in eastern Europe. All these will cost NATO money, but where should it come from? Consensus was lukewarm at best in the Wales summit.

NATO Gipfel in Wales 05.09.2014 Mig 29
Image: Joel Saget/AFP/Getty Images

"The details will be worked out in the coming weeks," NATO Secretary General Anders Fogh Rasmussen said after the summit in Wales, in answer to the question exactly how many troops will form the new "rapid reaction force," and who will bear the associated costs.

When it comes to money, alliance officials quickly become uncommunicative. Not only about this new project, but also defense expenditure in general. For many years, NATO's leading nation, the United States, has complained that the vast majority of European allies have been slashing their military budgets. Only the US, the United Kingdom, and in certain cases France possess cutting edge technology, and the ability to conduct airstrikes worldwide, a high-ranking NATO diplomat declared.

The goal of the 28 NATO countries is supposedly to spend two percent of their gross domestric product on the armies. According to an internal NATO study, only four members reached this goal last year: the US, the United Kingdom, Greece, and Estonia. Germany spent 1.3 percent.

Wales NATO-Gipfel 2014 in Newport Barack Obama
Obama said defense budget increases are vitalImage: picture-alliance/dpa

The magic two-percent goal was enshrined once again in Wales. Admittedly, according to the summit resolution, this is supposed to be achieved in ten years. The NATO secretary general's desired "obligation" to spend this sum was quickly erased from the draft summit paper by the respective governments. According to the delegations, Canada and Germany were the quickest to resist. Now the talk is only of "we aim to achieve" - a subtle but important difference. The US, one high-ranking NATO diplomat said, will again be disappointed.

Deterrence costs money

At his press conference, Barack Obama left unanswered the question of whether he is content with his allies' financial commitments. The US president said raising defense budgets will be necessary merely to cover the costs of current projects - something of an acknowledgement of intelligence and missile defense work.

For the new multinational rapid response forces, and to shorten the reaction time of the existing NATO Response Force (NRF), the member states must dig deeper. From NATO headquarters, those close to US commander Philip Breedlove estimate the new plans will require about $60 million (46 million euros) in the next ten years.

But Rasmussen said the money had to be raised sooner. "The costs will be incurred this year and next year," he said. If the west wants to make it clear to Russia that NATO is ready, it must demonstrate credible defense spending, he added. NATO has noted an increase in Russian military spending for years, and off the record, NATO officers have suggested there have been massive conventional upgrades.

The Stockholm International Peace Research Institute (SIPRI) says that Russia spends about 4.1 percent of GDP on defense, while the US allocates 3.8 percent and is the leading spender in absolute terms with $618 billion a year.

Nato-Gipfel 2014 in Wales 04.09.2014
NATO general secretary: part of the job is passing around the collection plateImage: Getty Images/P. Macdiarmid

UK and US take the lead

British Prime Minister David Cameron was the first to announce a first concrete commitment. He wants to contribute 1,000 troops to the new rapid response force, while Chancellor Angela Merkel would at first only offer 60 soldiers to reinforce a NATO headquarters in Poland.

The former NATO General Harald Kujat told DW that the German military had been cut too much. After six reforms in the last ten years, the last thing it needed now was another reform, he argued - what it needed was a correction. The Bundeswehr must not only defend with conventional land-based armed forces, but also be capable of foreign deployments with lighter armaments.

At NATO headquarters in Mons, Belgium, planners hope that Russia's threatening politics will increase willingness to spend more on the military. In Warsaw in June, Obama already put a billion dollars on the table to increase preparedness in the east. From these funds, he wants now to finance the American contribution to the new rapid response force, he said in Wales. NATO diplomats point out that the alliance has only a small common budget. Unlike the European Union, no member contributions will be levied for the defense alliance. "The costs lie where they fall," is the simple rule of NATO. This often means that the willingness to take the lead is not always great, NATO diplomats say: "Whoever says yes first, must also pay."

Continuous funding

According to Canadian news reports, German Defense Minister Ursula von der Leyen tried to take a little steam out of the negotiations ahead of the summit, saying the quality of the expenditure was as important as the amount of money spent. According to a summit resolution, 20 percent of defense expenditure would supposedly be for new weapons and investments, but only a few member states can achieve this. The majority of the money will be used for staff costs and associated pension claims.

The fight over funding will surely continue in NATO. Almost all of NATO's secretary generals have tried to free up more resources from member states. "Burden sharing," has been a concern for the last 25 years. "Part of my job there, unfortunately, is to pass around the collection plate," former Secretary General Jaap de Hoop Scheffer said once. Perhaps the new secretary general, Jens Stoltenberg, who takes office on October 1, will have more luck with the collection.

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