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Trump's NATO Budget Demands 'Difficult for EU Countries to Manage'

© AP Photo / Czarek Sokolowski / Soldiers park their amphibious vehicles on a ship as they participate in a massive amphibious landing during NATO sea exercises BALTOPS 2015 that are to reassure the Baltic Sea region allies in the face of a resurgent Russia, in Ustka, Poland, Wednesday, June 17, 2015
Soldiers park their amphibious vehicles on a ship as they participate in a massive amphibious landing during NATO sea exercises BALTOPS 2015 that are to reassure the Baltic Sea region allies in the face of a resurgent Russia, in Ustka, Poland, Wednesday, June 17, 2015 - Sputnik International
Donald Trump wants the NATO alliance to remain, but his call for European countries to spend more on defense comes at a difficult time as many are struggling under the weight of budget deficits, Robert Oulds, director of the London-based Bruges Group think tank, told Radio Sputnik.

NATO policy dictates that members spend two percent of their GDP on defense. In 2015, the US was one of only five members, along with Greece, Poland, Estonia and the UK, which met the target.

Last year the US spent 3.62 percent of its GDP on defense, but during the 2015 – 2016 financial year it ran up a budget deficit of $587 billion.

The country is also burdened with a national debt of $19.8 trillion. To put that figure in perspective, the top ten companies of the S&P Top 500 are worth less than 40 percent (a combined $3.9 trillion) of the US national debt. 

As a result, the US president-elect has threatened to cut the country's NATO spending, and called on other members of the 28-member alliance to shell out the required two percent.

During pre-election campaigning, Trump declared that under his leadership, America would only help NATO countries which pay "their fair share."

"I want to keep NATO, but I want them to pay," Trump told a rally in Pennsylvania in July.

Republican U.S. presidential candidate Donald Trump speaks at a campaign rally in Eugene, Oregon, U.S. on May 6, 2016 - Sputnik International
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"I don't want to be taken advantage of … We're protecting countries that most of the people in this room have never even heard of and we end up in world war three … Give me a break," the President-elect said.

Robert Oulds, director of the Bruges Group, a London-based think tank, told Radio Sputnik that Trump is "throwing down a challenge to European countries to spend more on defense."

"Many European countries have such deficiencies in their own budgets, it's going to be difficult for them to manage."

"According to what Donald Trump has said, if they don't step up to the challenge, he will move away from NATO. But if there is an increase in NATO defense expenditure, then one would have thought, depending on how the money is spent, that NATO's capabilities would increase," Oulds said.

The US and The NATO flag flie in front of two US Air Force F-22 Raptor fighter aircrafts at the Air Base of the Lithuanian Armed Forces in Šiauliai, Lithuania, on April 27, 2016. - Sputnik International
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At the moment NATO is "somewhat more than a defense bloc," which is engaged in conflicts around the world, and fulfils foreign policy goals too. If European countries stump up the extra cash, it remains to be seen how it would be spent.

"It seems President-elect Trump would be less adventurous, because he's been very critical in terms of attacking the policy of regime change, which in countries like Iraq and Libya haven't actually produced particularly positive results," Oulds said.

"The activities of NATO could be very different under a future President Trump, we could have a very different American foreign policy because he is a break with the past, he's criticized the neocons in the American administration, he's been very outspoken on this and consistent over many years."

On Thursday EU Commission President Jean-Claude Juncker called on the EU to set up a European army.

"We have a lot to thank the Americans for … but they won't look after Europe's security for ever," Juncker told reporters in Berlin.

"We have to do this ourselves, which is why we need a new approach to building a European security union with the end goal of establishing a European army."

A Tornado reconnaissance jet of the German army Tactical Air Force Squadron 51 Immelmann lands on December 2, 2015 in at the airbase in Jagel, northern Germany - Sputnik International
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Oulds is skeptical about the EU's capacity to establish and run a European army, which he regards as a "worrying" development.

"Perhaps they won't use it abroad, although one can never rule it out, but it really does show that the EU is not a peace project, when they are developing armed forces. I think it's far more likely that they will use it to try and keep internal order within the EU."

Another recession would bring more difficulties for the EU, which has run out of fiscal and monetary levers to deal with economic shock after running up large budget deficits and following quantitative easing policies.

"No doubt, there will be more difficulties to come when there is another economic crisis and the Eurozone completely collapses, at which point there could be serious trouble," Oulds said.

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