A new report by a British think tank has warned that if present budgetary trends continue, Europe could become the world’s fastest-growing region in terms of military spending.
On Thursday, the London-based International Institute for Strategic Studies (IISS) think tank released its Military Balance 2021 report, a broad annual measure of military trends around the globe. In the report, the academics note that defense spending by European nations, particularly those part of the North Atlantic Treaty Organization (NATO) alliance, have risen sharply in recent years.
“Total European defense spending grew by 2% in real terms in 2020. This was more modest than the 4.1% uplift seen in 2019, but the commitment by key players to increase their defence budgets in 2021 and beyond signals an intention to avoid the cuts that followed the 2007−08 financial crisis,” IISS noted. “If these spending plans continue on their current trajectory, in 2021 Europe could be the region with the fastest growth in global defense spending.”
The upward trajectory is mostly due to the alliance’s “2% rule,” following a 2014 pledge made in the midst of the Ukraine crisis for members to increase their defense spending to 2% of their gross domestic product by 2024. While the agreement was made while Barack Obama was US president, it was under Donald Trump that the US began putting serious pressure on the 29 other members of the alliance to “contribute their fair share” to the collective defense.
In NATO’s October 2020 report on the previous fiscal year, the alliance noted that just 10 members have met the 2% goal, although collective defense spending by the alliance increased by 4.3% in fiscal year 2020. The discrepancy from the IISS numbers comes from the US and Canada being NATO members but not European nations, while Sweden, Serbia, and several other European nations are not part of NATO.
A chart included in the report effectively illustrates the magnitude of the US’ defense budget, which at $738 billion is nearly equal in size to the combined defense budgets of the next 15 largest national defense budgets combined. However, these numbers are just the formal military budgets; the US’ true expenditure on its armed forces includes discretionary spending bills as well as those on nuclear weapons, which are managed by the Department of Energy, not Defense.
John Chapman, who heads the think tank, warned that Europe may not be able to maintain the upward trend. “The pandemic will affect global defense spending, though it will likely take until 2022-2023 for the full financial effect of government responses to start translating into defense budget cuts,” he told Defense News.
Worldwide, the hikes in defense spending helped push global defense spending to a new high of $1.83 trillion in 2020, a 3.9% increase over 2019, the report notes. In addition to Europe, spending in Asia also increased, driven upward largely by China’s swelling defense budget, which topped $193.3 billion in 2020 - a 5.2% increase over 2019.
While Trump is out of office, NATO’s policy remains unchanged. In an interview with Norwegian national broadcaster NRK last week, NATO Secretary-General Jens Stoltenberg announced a proposal that would shred the present policy of member states only paying for their own contributions to the alliance in favor of “a fairer distribution of burdens.” The change will first have to be discussed with the defense ministers of NATO members.
The 2014 pledge came about after a US-backed coup in Kiev brought right-wing nationalists to power who began to persecute the country’s substantial Russian-speaking minorities, most of whom are concentrated in the Donets River basin and Crimean peninsula, both of which rebelled against Kiev’s rule and the latter of which later voted in a referendum to rejoin Russia. Western powers called the reunification a “land grab” and an aggressive move against Kiev and have used it to claim alleged Russian irredentism is a danger to small nations on the Russian periphery, many of which were once until in a single state before the Soviet Union was dissolved 30 years ago.
On Thursday, the chief of US European Command, US Air Force Gen. Tod Wolters, referred to Russia as an “enduring existential threat to the United States and our European allies” and accusing Moscow of engaging in “destabilizing and malign activities across the globe” in an attempt to re-establish its Soviet-era area of influence.
The IISS report notes, however, that despite defense hikes by NATO that are directed at countering supposed rising Russian militarism, Moscow’s defense budget has declined in real terms and is set to continue falling over the next few years. In fiscal year 2021, Russia’s national defense budget has declined by 3.6% in real terms, with total Russian military expenditure set to decline from 4.1% of GDP in 2020 to under 3.8% by 2023.