Here's the Big Problem With Trump's New Spending Target for NATO

Flattering Trump might have bought time for Europe, but it won't solve an underlying vulnerability in procurement

Photo by Christian Dubovan on Unsplash

On June 25, U.S. President Donald Trump took a victory lap at the annual NATO summit in The Hague, Netherlands, celebrating the bloc's agreement to raise the target for defense spending to 5 percent from 2 percent. “It’s going to be very big news,” he told reporters. Trump has cast doubt on the U.S. fulfilling the alliance's mutual-defense commitment and demanded that European countries pay more for their own defense, even saying on the campaign trail last year that Russia could "do whatever the hell they want" to any country that doesn't meet spending targets.

On the face of it, the new target seems like a huge diplomatic win for Trump, who has complained--like past U.S. presidents of both parties--that Europe relies too much on Washington for its defense. And NATO officials encouraged this framing to placate Trump, who has threatened to pull the U.S. out of the alliance. On his Truth Social account, Trump posted fawning congratulatory text messages from NATO Secretary General Mark Rutte that read: "Europe is going to pay in a BIG way, as they should, and it will be your win. Safe travels and see you at His Majesty’s dinner!” At the summit, Rutte likened him to a “daddy” making peace between squabbling Iran and Israel.

Indeed, 5 percent is a huge number--roughly 1.5 percentage points more than the U.S. spends on defense. (Trump has said that the new target doesn't apply to the U.S.) However, there is less than meets the eye with the top-line number, and much of European defense spending is lost to staggering inefficiencies.

First off, the new number isn't actually 5 percent. It's 3.5 percent on core defense like troops and weapons plus a new 1.5 percent target on defense-related investments, including infrastructure protection. The additional spending is vital considering recent Russian sabotage attacks on critical infrastructure, but it is separate from the traditional target. In addition, Spain, which, like France, has run persistent budget deficits and thus has troubles spending more on defense without cutting spending or raising taxes (both of which voters hate), secured an amendment that watered down the summit's declaration to allow for less spending. Madrid has committed to only spending 2.1 percent of its budget on defense, barely above the old 2 percent target.

Meanwhile, European defense spending has been extraordinarily inefficient, and spending more can only help so much without reforms. In the EU, defense spending is overwhelmingly at the national level, funded by national governments. With 27 EU members, this creates huge inefficiencies: national governments make different weapons systems that cannot always work together. One study by the European Parliament's research arm noted that there are 17 different kinds of tanks in operation in the EU, compared with just one for the U.S. Another study by the Parliament said that the lack of an integrated approach at the EU level cost national governments 44 cents out of every one Euro invested in defense.