Penny Wise, Pound Foolish: Trump’s Misguided Views of European Defense Spending


The Trump administration has worked itself into a frenzy as to how much (or how little) our NATO allies spend on defense and whether the alliance is, as a result, a “good deal” for the United States. President Donald Trump himself (and former President Barack Obama) have hectored the Europeans about their free-riding—and Trump extravagantly claimed in his February 28 speech before Congress that his efforts were responsible for allied money “pouring in.”

Even Secretary of Defense James Mattis, widely regarded as a stabilizing and moderating force on Trump’s national security team, warned NATO defense ministers and those gathered at the recent Munich Security Conference that the U.S. security commitment hung in the balance, declaring:

Americans cannot care more for your children’s future security than you do…If your nations do not want to see America moderate its commitment to this alliance, each of your capitals needs to show support for our common defense.

American officials from both Republican and Democratic administrations have been gnashing their teeth for years over what some see as insufficient European defense spending. Before he left the Pentagon, Secretary of Defense Bob Gates thundered in a speech in Brussels that the alliance faced “a dark and dismal future if allies did not do more on defense.” Former Secretary of State Madeleine Albright during Senate hearings on NATO enlargement insisted our allies share NATO’s defense burden more fairly. The alliance guideline that every member should spend at least 2 percent of its GDP on defense has been around since the 1970s. Allies have routinely paid lip service to this pledge and most have not met that target. And now, for the first time, an American president and his secretary of defense have threatened to make the U.S. security commitment to Europe contingent on the Europeans ponying up.

It is certainly true that the U.S. defense budget far outweighs the budgets in the rest of NATO, by a factor of more than two to one. And it is equally true that the United States spent 3.6% of its GDP on defense in 2016, while only Greece, the United Kingdom, Estonia, and Poland met or exceeded the 2 percent target, according to NATO data. But the one-size-fits-all 2 percent benchmark is a flawed measurement for national defense efforts. While these raw numbers suggest free-riding, they are in fact a side show and far less relevant to alliance cohesion and defense capabilities than the administration has suggested. Here are six reasons why the burden-sharing argument is not nearly as black and white as the White House has portrayed.

First, and most important, measuring what the allies spend on defense as a share of their economies tells us nothing about the capabilities they are buying. For example, when the bottom fell out of Greece’s GDP , even cuts in defense spending meant that its percentage of GDP stayed above 2 percent. China seems to do pretty well spending only 1.3% of its GDP on defense. This metric only tells us the burden of the defense dollar on the economy. America’s NATO allies spent roughly $260 billion on defense, compared with over $600 billion for the United States. But we should look at the capabilities members of the alliance buy with their defense expenditures, whether they are spending these funds effectively and efficiently, and whether NATO is valuable to the security of its partners.  Less, the same, or more alliance defense spending is not a good bargain for the United States if members are not buying the right capabilities for the defense of Europe and the deterrence of aggression against allied territory.

The European problem is not only about how much they spend, but also, more importantly, whether they are spending smartly. For example, the personnel investments of some allies are still too large, making technology investments fiscally difficult. And even on the technology side, there continues to be considerable and costly national duplication in European procurement of military equipment. The French buy French tanks, not German. The Germans buy German short-range missiles, not French. The British build their own aircraft carriers, but struggle to do one jointly with France.

At least until very recently, the European Union has been impervious to calls to rationalize both national military capabilities and defense industries. This could be accomplished through joint force development and greater efforts at specialization and joint research, development and equipment acquisition. (Some uneven progress has been made with respect to missiles and transport aircraft.) If the Europeans streamlined their forces with each other and reduced defense industrial duplication across nations, they could produce the capable forces the alliance needs for the same or even less money regardless of how much they spend or the share of GDP that spending consumes.  At an EU summit late last year, members agreed to put more funds toward joint research and development, but progress here is unpredictable.

Second, spending comparisons between the United States and its NATO allies are misleading and a matter of apples and oranges. The missions for those forces differ significantly. Regardless of the share of GDP or the absolute level of defense spending, the United States and its European allies do not always define the “burden” the same way. Only some defense missions are commonly shared.  The United States spends as much as it does on defense because U.S. government policy has for years defined its defense missions in global terms: forces that can deploy, sail and fly everywhere, using the world’s only global military logistics, basing infrastructure, transportation, communications, and intelligence. The rest of NATO does not have such ambitions. Naturally, European military needs cost less for a more restrained set of missions.

Third, NATO has been a hugely valuable asset to the United States, making some American costs unnecessary.  European allies have for the most part done everything Washington has asked them to do over the past two decades, particularly when it comes to expanding the NATO mission outside European territory. Most of them sat out the Iraq War, but they have been with America in Afghanistan even though the costs in blood and treasure were more than they bargained for; they also were out front in the military campaign to overthrow Qaddafi.

Washington’s European allies have also taken on military and stabilization missions that protect American interests but that the U.S. military does not want to perform.  From 2002 to 2014, the European Union or individual EU members deployed military and civilian assets for numerous peacekeeping, policing, monitoring, and capacity building missions.  These operations took place in Europe, Africa and Asia—from the Balkans, Georgia, Sudan, and the Sahel to the Gaza strip, Indonesia, and the waters of the Mediterranean and the Indian Ocean.  The Europeans dedicate more forces than the United States to Balkan peacekeeping—a job American forces would prefer not perform.  If Europe (and especially the French, for example) were not operating in Africa (e.g. Mali), a greater burden would fall on the United States and common Western security could be undermined.

Fourth, the United States gets real fiscal advantages out of the NATO security architecture.  It saves the United States taxpayer money to base roughly 85,000 military personnel in Europe which might otherwise have to be deployed in the United States. They help to defray a large part of the tab for stationing U.S. forces in Europe – a bill the American taxpayer would otherwise have to pay. In Germany, where many of the largest U.S. bases in Europe are located, the government provides tax waivers and rent-free use of facilities to American forces. Germany also builds roads and other infrastructure to support American installations. And the Germans, along with other allies, make a substantial contribution to the NATO Infrastructure Program, the alliance’s commonly funded military construction that has built critical facilities (e.g. airfields, shelters, common communications, and air defense installations) throughout its territory.

Fifth, there are major logistical and deployment advantages to the United States having forces in Europe, especially for the missions the military has undertaken over the past 25 years.  It is much quicker to deploy American forces from their European “lilypads” to the Middle East and Southwest Asia than it is to deploy from the United States, whether or not the Europeans join in those missions.

Sixth, military forces —as America’s European allies have repeatedly reminded successive U.S. administrations —are not the only contribution Europe makes to transatlantic security. As the German Minister of Defense noted recently at the Munich Security Conference, America’s allies make significant non-military contributions to the defense of common interests.  Trump might not like foreign aid.  And he seems to care little about improving governance, education and human rights abroad.  But when other nations fall apart, what happens inside those countries does not stay there.  Our European allies have connected these dots and have a panoply of tools in their kit that the U.S. government has under-resourced for years. Their assistance for improving governance in weak and failed states is comparable to America’s and, in many areas, more effective.

The debate over burden-sharing is about as old as the alliance itself, as are the exhortations of American officials and security experts for the allies to ramp up their defense spending.  And until recently the boundaries of this debate have not changed since the creation of NATO.  Washington’s bottom-line must be unavoidable: The defense of Europe is a vital American interest because a secure and prosperous Europe — and preventing a hostile power from establishing its hegemony over the continent — are good for America and for the world.

Increasing European defense budgets to an arbitrary 2 percent share of GDP by all allies is politically unrealistic.  A number of countries have fiscal issues that would be made worse by rapid defense spending growth, others are absorbing a large refugee flow, and there is not a great deal of public or parliamentary support for such an increase.  Even then, in the last few years our NATO allies have begun to improve their forces, and more recently a number have increased their defense spending. Greater efficiencies in equipment procurement and less duplication in force structure, however, could reduce the need for defense spending increases.

Spending more for the sake of spending more is not the answer — more targeted and smarter spending is. Specific increases in spending will fill serious gaps in allied defense requirements, and allies can acquire these capabilities without increases in defense spending by reordering priorities, investing more wisely and deepening defense cooperation with each other.

All this said, a green eye shade focus on the amount allies spend on defense — and whether they meet the arbitrary and unrealistic 2 percent guideline — rather than on how the alliance spends money misses the big picture. The real issue is not money; it is capabilities.

A one-size-fits-all blunt instrument like the GDP goal, that does not and will not work, is an endless hamster wheel approach — rather than produce results, it will just irritate both sides. The transatlantic relationship is already, to use one of President Trump’s favorite words, a “fantastic” deal for America — strategically, militarily and financially. However, the larger issue the Trump administration needs to face is that NATO at its core is not about dollars or GDP shares; rather, it is about trust and solidarity.

These are the equities the administration is putting at risk by linking America’s continued commitment to European security to allied defense spending, missing the clear advantages of NATO to the United States, and hyperventilating about free-riding.


Richard Sokolsky recently retired after 37 years in the State Department.  From 2005-2015 he was a member of the Secretary of State’s Office of Policy Planning.  He is currently a non-resident senior fellow at the Carnegie Endowment for International Peace.

Gordon Adams is Professor Emeritus at American University, Distinguished Fellow at the Stimson Center, and co-author of Transforming European Militaries: Coalition Operations and the Technology Gap (Routledge 2006).  From 1993-1997 he was the senior White House national security budget official.