President Trump’s reassurances last week to U.K. Prime Minister Theresa May that the North American Treaty Organization (NATO) was not, in fact, “obsolete” are unlikely to have Europe taking up more of the defense burden, at least in the short term.
As discussed here in the Monkey Cage, national security adviser Michael T. Flynn wants to see other NATO members pay more of the cost of defending Europe. It’s not a new pitch, but such calls neglect the budgetary, financial and political barriers to enhanced military capabilities in Europe.
And such barriers will remain in place even if European countries succeed in implementing ambitious defense plans that include active measures to strengthen defense cooperation, endow the E.U. with defense capabilities and launch a common research fund.
The transatlantic gap in military capabilities — how much defense output the two sides of the Atlantic are able to generate, respectively — has three main causes that cannot easily be addressed:
1) European countries have limited defense budgets — On average, defense expenditure in Europe is just over 1 percent of GDP, while the U.S. defense budget is well above 4 percent of GDP. Would a U.S. retrenchment push European allies to fix this imbalance, and bring NATO members closer to the 2 percent threshold they pledged to move toward in 2014?
Maybe. But half of NATO’s members are small countries with small defense budgets, well below $2 billion per year. Thus, a substantial bump in their military spending won’t bring about a significant increase in Europe’s overall military investments. Estonia’s 2 percent GDP defense expenditure amounts to just $500 million, for instance. That might pay for the operational costs of a few of middle-sized U.S. warships, but wouldn’t push back a Russian invasion.
With the exception of Germany and Poland, large E.U. countries face financial and political constraints to increasing military expenditure. The U.K. is going through Brexit, which will also affect several countries, in particular the Netherlands and Ireland. Italy’s bank problems loom large, and Spain and France have limited financial and political room for additional public spending. This points to a broader problem.
In part, U.S. security assurances may have freed up state funds in Europe for other priorities, including a robust system of social services. However, cutting welfare state provisions in Europe to fund defense expenditures is going to be extremely difficult, if not counterproductive.
On the one hand, those who receive these benefits are far more numerous, and thus politically more influential, than those receiving a direct benefit from military spending. On the other, cuts in welfare spending risk actually bringing additional support to anti-establishment parties like the Five Stars Movement in Italy, Die Linke in Germany or Podemos in Spain — all of which have strong anti-defense stances.
2) European countries pay more in defense overhead — All armed forces require military bases, training facilities, and administrative support. So in a continent with several small, national armed forces, overhead necessarily absorbs a higher fraction of resources than in the United States.
A solution for Europe would be to share some military assets and functions. In recent years, there have been important bilateral and multilateral initiatives in this respect — but there are strong political limits as well.
Countries have no guarantees their partners ultimately will support them in a military crisis. Thus, if sharing turns into a lock-in, countries run the risk of having access to fewer military capabilities than they might need. This explains why the width and depth of past initiatives have been generally limited.
However, this comes at the cost of intra-alliance inefficiency and thus an inferior capacity to generate military capabilities. An E.U. Defense Union could address these problems, but efforts to set this up face many of the same challenges: Why should a country tie its destiny to others? How can it ensure that its interests will be respected? And what tangible benefits would it observe in the short term, beside loss of jobs and income, following base closures and defense industry consolidation?
3) Implementing defense cooperation in Europe won’t be easy — Some analysts think that by promoting cooperation among NATO allies, any U.S. retrenchment from Europe would help address existing problems, but there are strong reasons to be skeptical.
With Europe’s limited funds to spend on defense, large cooperative projects will be difficult to launch. In the past, countries in Europe abandoned cooperative projects because of their negative domestic implications for jobs, technological know-how or military exports. In an age of austerity, amid a refugee crisis and high youth unemployment, this mind-set is unlikely to change anytime soon.
And some countries may have little interest in cooperation. They may operate in completely different environments — Mediterranean vs. North Sea, for example. Or they perceive a different strategic threat at home — think Russia vs. the Islamic State. Some countries may even have a strategic interest in leaving unaddressed some capability gaps — to compel proximate allies to come to their defense. This was Finland’s military strategy during the Cold War.
Can the European Union step in and mandate greater defense cooperation?
At the moment, anti-E.U. rhetoric complicates any additional transfer of power toward Brussels. Similarly, E.U. member states have different options to resist initiatives that do not fit their particular needs.
Two 2009 directives from the European Commission aimed at liberalizing the European defense market and thus at preventing member states from acquiring weapon systems from their national industry remain largely stalled. After almost a decade, their effects have been limited and it is not clear that the situation can change anytime soon.
And the E.U. has its own legal and budget constraints. For instance, the European Commission recently created a platform to fund defense research and got just under €90 million ($97 million) in contributions. Although the Commission expects to see this funding grow to €3 billion ($3.2 billion) through 2027, this sum still pales in comparison to the $70 billion in U.S. defense research funding.
Because of financial, budgetary and political constraints, European countries will not be able to generate a significantly higher defense output in the short and medium term, even if military expenditures or defense cooperation were to grow remarkably.
There may be some enhanced European capabilities, assuming some uptick in cross-border cooperation and a growing role for E.U. defense-related institutions. The more likely scenario is that, overall, these initiatives will not be able to alter the conventional balance in Europe.
Future electoral dynamics in coming months in Germany and France, along with strategic pressures — from NATO’s eastern flank to instability in the Middle East — also will determine whether the E.U. will play a bigger or smaller role worldwide.
However, the United States ultimately can play one very important role in this respect. Although recent U.S. official statements seek to reassure NATO partners, a quick and wide withdrawal of U.S. troops from Europe clearly would increase the mutual lack of trust and insecurity and thus, ultimately raise additional barriers to mutual defense cooperation.
Andrea Gilli is post-doctoral fellow at Stanford University’s Center for International Security and Cooperation.