NATO needs a European 2 per cent

Nato’s summit in Brussels yesterday, the first for US president Donald Trump, was intended as a fresh start, a chance for him to distance himself from previous comments in which he called Nato obsolete, and to reassure allies of the steadfastness of the American security guarantee that is at the core of the alliance.

Instead, he chose to berate European allies for their failure to spend enough money on defence, and kept silent over his commitment to Article 5, Nato’s mutual defence clause.

In his remarks, Trump once more demonstrated a muddled understanding of Nato’s financing arrangements, wrongly accusing allies of “owing” money for previous years, failing to acknowledge that the alliance’s target to spend 2 percent of their GDP on defence is not a debt to be paid, but rather based on a pledge signed by all members in 2014 and to be achieved by 2024.

The 2 percent target has been at the centre of discussions over trans-atlantic burden sharing between Europe and North America for years, and yet, debate is stuck.

Two points most people can agree on: first, European allies need to spend more money on defence and step up to their responsibilities within NATO. Second, the 2 percent metric is fundamentally flawed.

Defence spending means little unless it translates into improved military means. The combat readiness of European militaries is fairly low, and they lack the right capabilities, while greater spending does not always amount to greater efficiency.

Greece, which meets the 2 percent guideline, spends over 70 percent of its defence budget on personnel costs, wages and pensions. By reducing it to an input metric, EU governments can also easily dismiss the target as promoting spending for spending’ sake.

Sigmar Gabriel, Germany’s foreign minister, recently quipped that he would “honestly not even know where to put all the aircraft carriers” Germany could buy with €70 billion, which would equal 2 percent of German GDP.

The reason the 2 percent metric is still in use, despite its flaws, lies in its power as a political message: the simple target serves as a standard to measure the military value of European Nato allies, particularly to the US administration.

But with the new US president, the political value of the 2 percent is decreasing.

There is some discomfort in Europe at the protection racket approach Trump is applying to Nato, and the idea of increasing military spending to please him is playing out to the detriment of European defence.

Nato secretary general Jens Stoltenberg said recently that “increased military spending isn't about pleasing the United States. It is about investing more in European security, because it is important to Europe.”

So, how can the defence spending debate move forward?

Moving forward

Would it not be possible to come up with a European metric that looks to European aims and interests, is forward looking, output-focused and creates consensus on both side of the Rhine?

By setting their own targets and indicators, European leaders might help curtail anti-American sentiments, not to mention the suspicion they are feeding into American industrial interests.

A European metric would give Europe some leg-room to build a narrative that is in line with its own world view, one that thinks of security as more than a military matter, and would help to make the case for spending more on security and defence.

Firstly, the EU should compile current levels of defence spending according to a common EU methodology, built for the purpose of comparing like to like.

Surprisingly, this does not exist, despite being the basis for a co-ordinated approach to European defence spending.

It should complete the picture with some easy wins: usability, projection power, sustainability, planned defence spending over the next five years by European states, operational readiness rates for major platforms, deployability of land forces and top ten planned procurements by value.

Notably, the mooted Coordinated Annual Defence Review to be run by the EU’s defence agency, the EDA in Brussels, will be a handy way of furnishing such standardised data.

This should feed into the work already undertaken by the European Commission, which wants to include a sizeable pot of money for defence in the next multi-annual financial framework, to fund collaborative research in innovative defence technologies, and support the development of high-tech military prototypes.

Cuts to stop

All these efforts stem from the root consensus of the last two years that in the face of Europe’s security challenges, defence cuts need to stop.

Germany’s Gabriel has spoken to the doubts of some when he said that a sensible security policy should not just be “buying tanks, driving defence spending to insane heights and escalating the arms race”.

He wants to broaden the debate to include crisis-prevention, stabilisation of weak states, economic development and the fight against hunger, climate change and water scarcity.

Italian Foreign Minister Angelino Alfano has noted that operational contributions, such as Italian search-and-rescue operations for migrants in the Mediterranean, should also be factored in.

EU Commission president Jean-Claude Juncker has gone so far as to say that the EU’s development and humanitarian aid spending made up for any shortfalls in military funds, although it helps to recall that in 2016, only five EU member states reached the UN goal of spending 0.7 percent or more of their Gross National Income on development assistance.

Wolfgang Ischinger, the Chairman of the Munich Security Conference has recently proposed that instead of the 2 percent, Europeans should aim to spend 3 percent of GDP, incorporating development spending and diplomatic and humanitarian assistance into the budget.

This year could be the year to kick off a European debate that goes beyond the 2 percent and looks to European priorities.

It might trigger a broader rethink about different European national security identities: countries with conventional conflict at their borders could spend more on territorial defence, countries that are particularly affected by the refugee crisis could include their contributions, countries with interests abroad might want to focus on peacekeeping missions.

The European External Action Service and the European Defence Agency would be well placed to coordinate such an effort.

Tanks are important

Two important caveats: first, European efforts to emancipate its defence spending debate from the United States should not be an excuse for the EU to forget once more that hard power is useful in a chaotic neighbourhood - as a way to protect Europe from threats, as a diplomatic lingua franca, and simply as a tool of statecraft.

Central and Eastern European states that face the threat of a belligerent Russia on their borders are likely to disagree with Gabriel about the importance of tanks.

Second, European leaders hedging their bets against the risk of weakened American security guarantees in Nato should not fall into the trap of merely creating parallel structures in the EU.

On the contrary: this is an opportunity for them to take ownership of Nato’s defence policy and push for European priorities in the alliance, one of the being better co-operation between Nato and the EU.

The security challenges of the last two years have led European leaders to acknowledge the need to take responsibility for their own security.

Yesterday’s Nato summit should motivate them further. Europe deserves a political debate on what it would and should be able to achieve on its own terms.

Olivier de France is research director at the French Institute for International and Strategic Affairs, a think tank in Paris. Sophia Besch is a research fellow at the Centre for European Reform.