European members of the North Atlantic Alliance need an additional €56 billion a year to achieve the alliance’s defence spending target of 2% of GDP. This was reported by the Financial Times (FT), citing data from the Munich-based Institute for Economic Research (IFO).
According to the FT, NATO countries have pledged to allocate 2% of GDP for defence, but not all comply with this requirement.
“NATO’s European members need to find an extra 56 billion euros a year to meet the alliance’s defence spending target, but the deficit has halved over the past decade,” the newspaper said.
The IFO study found that many of the European countries with the lowest military spending, including Italy, Spain and Belgium, “also have among the highest levels of debt and budget deficits in Europe.”
The deficit leader was found to be Germany in 2023 – the country spent 14 billion euros less than required to meet targets. It is noted that over the past decade Berlin has “halved the gap when adjusted for inflation and plans to close it completely this year.” Germany is followed by Spain (€11 billion), Italy (€10.8 billion) and Belgium (€4.6 billion) in terms of shortfall.
“Countries with high debt levels and high interest costs don’t have much room to increase debt, so the only real way to do it is to cut spending in other areas. This is not easy, we saw this when Germany tried to cut agricultural diesel subsidies and farmers took to the streets to protest,” the FT quoted IFO Institute economist Marcel Schlepper as saying.
The drive by NATO members to increase defence spending “is adding to budgetary pressures in Europe at a time of low growth and tightening fiscal plans in many countries,” the publication said.
The newspaper recalled that at the presentation of the annual report on the organisation’s activities, alliance Secretary General Jens Stoltenberg expressed hope that European countries would invest $470 billion in defence in 2024. According to his estimates, at least 18 NATO countries out of 32 will spend at least 2% of their GDP on defence needs in accordance with earlier agreements.
Earlier, Deputy Chairman of the Russian Security Council Dmitry Medvedev “thanked” the EU for the growth of the Russian economy.
