The case for better defence burden sharing

With the renewed Russian offensive against Ukraine, many of the central strategic assumptions of the 1990s and 2000s are finally dissipating. Worse, just a week before the invasion, Russia and the People’s Republic of China (PRC) elevated[↗] their strategic partnership at the 2022 Winter Olympics in Beijing. Although the PRC has not openly supported the Kremlin’s actions, its position – summarised in ‘five points[↗]’ – brings its views on Russia’s war against Ukraine closer to those of the Kremlin. To no small extent, the two authoritarian powers are working together to undermine the open international order, representing, in turn, the return of geopolitical competition. The resources at their disposal may be different, and their interests may not be the same, but both benefit from a democratic world that is militarily weak and irresolute.

The gulf between the interests of authoritarian countries such as Russia and the PRC on the one hand, and the free world, on the other, should raise difficult questions about the democracies’ ability to defend themselves and protect their geostrategic interests. Even where the international order is at its most open – in Europe and parts of the Indo-Pacific – geopolitical competition is intensifying. 

The United Kingdom (UK), with its initial November 2020 uptick in defence spending[↗] and the publication of the Integrated Review[↗] in March 2021, was one of the first to grasp the changing nature of international relations. For others, Russia’s invasion of Ukraine has acted as a point of inflection. On 26th February 2022, Germany, long spending a mere fraction of its Gross Domestic Product (GDP) on defence, announced[↗] a €100 billion (£83.6 billion) package to modernise the Bundeswehr (the German Armed Forces). This will take German defence spending to above 2% of GDP, a commitment Berlin made during the 2014 North Atlantic Treaty Organisation (NATO) Summit in Newport but on which it has until recently failed to deliver. In light of the current European situation, is it not time for other NATO allies to deliver?

NATO and major powers’ defence spending compared

Using NATO’s defence spending statistics[↗], some alarming patterns appear. On average each year since 2010, the combined spend of NATO allies, minus the United States (US) and UK, the two largest defence spenders within the alliance, was US$77.51 billion (£57.92 billion) below what was required if all these members were to hit their 2% of GDP target. Due to modest increases since 2014, primarily made by Eastern European NATO allies, this figure has fallen to US$47.44 billion (£35.45 billion) and US$49.60 billion (£37.06 billion) for 2020 and 2021, respectively. Underspending on defence leads to a lack of readiness and military capability, and this accumulated deficit could prove to be decisive for NATO’s ability to protect its member states and deter would-be aggressors.

Estonia, Latvia, Lithuania, Poland and Romania all seem to realise this, and since 2020 (at the latest) have all been meeting their 2% of GDP target. Estonia has been meeting this target since 2015, not least due to its heightened sense of insecurity amid Russian posturing. But insofar as it is now plainly evident how far the Kremlin is willing to go, it should not be down to the most exposed – and often, relatively poorest – allies to open their purses.

With some of the highest real GDP in NATO, Italy, the Netherlands, Spain and Turkey ought to do more. Since 2010, these nations have accounted for approximately 50% of NATO allies’ collective yearly underspend, with this figure rising to approximately 60% and 65% for 2020 and 2021, respectively. Meanwhile, despite agreeing to act as a ‘framework nation’ in Latvia for NATO’s Enhanced Forward Presence, Canada – a G7 economy and member of the ‘Five Eyes’ intelligence sharing group – is also responsible for a large chunk of the underspending. Since 2010, it has underspent by some US$150 billion (£114 billion).

Not only does this ongoing underspending erode NATO’s defence capabilities and its ability to act as a security guarantor for allies with less capital to spend on defence, but it also raises questions about burden sharing. If these nations were to meet their 2% of GDP target, a serious injection of capital would go into NATO’s collective defence, something which is needed now more than ever.

This is particularly the case given that the PRC, and to a lesser extent, Russia, have ramped up their military expenditure since 1990 (see Graph 1). According to the Stockholm International Peace Research Institute’s data[↗], Russia’s military spending has more than doubled since 1995 (no figures available for 1990), while the PRC’s has increased ten-fold since 1990. All the while, European and Canadian military spending has remained relatively stagnant or has declined.

Graph 1: Major powers’ defence spending (1990-2020)

The strategic failure of inadequate defence spending

A failure to spend appropriately on defence has strategic consequences. It is not clear whether the unwillingness of the European democracies to invest in their armed forces was seen by the Kremlin as emblematic of their strategic irresolution to assist Ukraine. But in Prime Minister Boris Johnson’s words[↗], it is increasingly clear that ‘accepting the results of Russian aggression merely encourages more aggression.’ If the Kremlin secures its strategic objectives in Ukraine, it is not clear where it will strike next.

This mandates higher defence spending, particularly by NATO’s larger European members. The UK stepped up in late 2020; Germany stepped up a few days after the renewed Russian offensive in Ukraine; and other European countries are also reported to be debating military expenditure increases. Despite having already increased UK defence spending, Her Majesty’s (HM) Government should seriously consider boosting British spending even further to ensure that the right message is heard throughout Europe’s halls of power, while signalling to other European allies that they are expected to do more to meet their NATO commitments and pull their weight.

Conclusion

In tandem with higher spending, NATO members should take significant steps to coordinate their increases with enhancing coordination, logistical reach and interoperability. There is currently a European overreliance on American (and British) air and naval capabilities to get their troops and vehicles to the right destination. In future, due to the PRC’s activities in the Indo-Pacific, the US may not always be available to help. Increased European defence spending should not just mean more tanks, weapons, and high-tech equipment, but also better logistics and force projection, deliberately calibrated to enhance NATO’s web of deterrence. This combination will be key to enhancing NATO allies’ ability to deter future attacks on the open international order, and perhaps even their own security.

Many of the major strategic assumptions of the post-Cold War order in Europe have died with the Russian offensive in Ukraine. The luxury of low defence spending should die too.

James Rogers is Co-founder and Director of Research at the Council on Geostrategy.