Is NATO a ‘three-tier’ alliance?

Posted on October 16, 2016

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Despite commitments by NATO Member States to increase their defence budgets, it is unlikely that many of them will indeed reach the 2 percent target by 2024. While some large NATO economies actively seek to project their power on a global scale, others are quite comfortable in their role of regional powers or are suffering from sluggish economies and cannot be expected to significantly increase (or in some cases even double) their military spending. This may not necessarily mean that some countries are less committed to NATO than others. However, it does mean that an alliance made up of multiple tiers is inevitable.  


The Wales Summit of 2014 addressed what was then (and still is) one of the most pressing and potentially divisive issues in the context of the NATO Alliance: the problem of uneven burden-sharing among alliance members. In fact, at the time of the Summit, only 3 out of the 27 Member States that have standing armed forces were complying with NATO’s non-binding guideline to spend more than 2% of their national GDP on defence.[1] These countries were the United States of America, the United Kingdom, and Greece.

NATO defence spending in Europe has decreased drastically since the end of the Cold War. In 1990, the combined defence budgets of the European Member States amounted to around USD 314 billion; in 2014, this number had dropped by almost 22% down to 245 billion.[2]  During this period, the financial crisis of 2008 had ensured that major cuts were made by most European countries in a concert of austerity measures that involved the entire continent.[3] Italy is the most striking example: its defence budget has dropped by 30% between 2006 and 2015.[4] Today, despite having a combined GDP greater than that of the U.S., European allies together still spend less than half of what their American counterpart spends on defence.[5]

For decades, this gap in spending has been a worry in the U.S., where numerous officials and politicians, including President Barack Obama, have accused some European states of “free riding” and relying on the alliance’s dominant power to do the spending for them.[6] Indeed, President Obama made repeated calls at the Wales Summit for an increase in military spending by NATO allies, pointing at Russia’s aggressive policies in Crimea and Ukraine as a reminder that defence spending should not be taken lightly, especially by European Member States.[7]

The Declaration that resulted from the Wales Summit openly called for those countries whose defence budgets were lower than the 2% of GDP guideline to “halt any decline in defence expenditure”.[8] This particular point was a rather important one because it came in a context of increasingly aggressive Russian policies in Eastern Europe and almost universal defence budget cuts by the major European powers. In addition, NATO members agreed in Wales to “aim to move towards the 2% guideline within a decade” in order for the alliance to finally meet its Capability Targets.[9]

Since 2014, 18 Member States have increased their defence spending by a very meagre 1.5%.[10] This increase, however, was mainly a result of growing uneasiness among the Eastern and Northern European Member States at Russian military build-up and aggression in Crimea and Ukraine. Southern European defence budgets, which had experienced the greatest cuts after the financial crisis, have been increasing, if slightly, since 2014. In contrast, Western European alliance members (which account for nearly 70% of total European military spending at NATO level) have cut their budgets in 2015, with the exception of France.[11] Germany and the U.K. have slightly increased their budgets, but the outlook remains bleak at best if the ultimate goal is for most NATO Member States to reach the 2% guideline.

Defence Expenditure as a share of Gross Domestic Product (based on 2010 prices and exchange rates)

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NATO ©

While the U.K. can be expected to keep spending above the threshold and France is moving towards it, the other major European economies are either incapable (Italy and Spain) or unwilling (Germany) to significantly increase their military spending to appease NATO and American calls. Austerity measures notwithstanding, it is difficult to foresee a significant increase in defence spending by countries like Germany, Italy, and Spain simply because (unlike France and the U.K.) these countries do not have to justify a permanent seat at the Security Council in the face of mounting pressure from emerging economies.

Indeed, Germany’s minister for defence Ursula von der Leyen stated in June 2015 that she did not see the necessity for her country to reach NATO’s 2% target.[12] Germany’s military spending has been steady at around 1.2% of GDP and, considering the country’s huge economy, the remaining 0.8% share (of today’s GDP) to reach NATO guidelines would amount to about 26 billion USD. It is unlikely that Germany will feel compelled to boost its military expenditure by tens of billions of U.S. Dollars by 2024 unless major events can significantly upset the country’s feeling of security.

It is clear that Western European NATO members feel more secure than they did during the Cold War – even now that Russia is aggressively projecting her influence on the international stage and Europe’s neighborhood is proving once again to be unstable (see conflicts in Libya, Ukraine, and Syria). Indeed, while most NATO’s Eastern European allies are expected to continue increasing their defence budgets or at least keeping them above the 2% guideline as a result of Russian foreign policy, there is little incentive for a number of their wealthier Western European neighbours to do the same. Jan Techau of Carnegie Europe argues that the 2 percent target represents a considerable credibility risk for NATO, because a failure to meet the non-binding commitment by alliance members within 2024 would show weakness in the eyes of potential rivals.[13]

Furthermore, Techau argues correctly that “the 2% metric looks weak when held against qualitative  standards” because “it says nothing about the ability of a country to absorb the funds in such a way that produces concrete additional military capability”.[14] Indeed, according to Techau, the 2 percent shouldn’t be expected to act as a useful tool to encourage more military spending, but may be looked at as an indicator of political will and commitment to NATO.

Former U.S. Defence Secretary Robert Gates was thinking of commitment when he warned in 2011 that NATO had split into a ‘two-tier’ alliance “between members who specialise in ‘soft’ humanitarian, development, peacekeeping, and talking tasks, and those conducting the ‘hard’ combat missions”.[15] However, if commitment is to be measured by a country’s willingness to wage offensive wars and project its power across the globe, it is difficult to argue that NATO was ever a ‘one-tier’ alliance. Indeed, while the United States, France, and the United Kingdom have historically been inclined to interventionist endeavours in the Middle East and Africa, the two remaining European G8 and NATO powers (Germany and Italy) are both extremely war-wary. Moreover, Germany’s military can only be deployed by parliamentary approval and Italy’s constitution rejects war as a form of aggression. The two countries are therefore only ever likely to engage in peace operations or non-combat roles within larger ‘coalitions of the willing’.

Financially, however, it has been argued in this article that NATO is undoubtedly a ‘two-tier alliance’ and that it has been one for decades: the U.S. defence budget is more than ten times that of the U.K., which is the second largest spender on defence in the NATO alliance.[16] Furthermore, it is unlikely that countries such as Germany, Italy, and Spain will drastically increase their military spending because of a non-binding declaration that was signed by politicians who will almost certainly not be in power come 2024. As Techau points out, “the ten-year deadline lets current governments off the hook and increases the temptation to leave the painful implementation to successor governments”.[17]

In conclusion, NATO is indeed a tiered alliance though it can be argued that there are in fact three tiers, rather than the two proposed by Robert Gates. Countries are not assigned to the three tiers uniquely in terms of their compliance with the 2% guideline but also in terms of absolute expenditure and their ontological sense of self (i.e. what role they believe they should take in world security). The U.S. makes the first tier thanks to its ontological commitment to being a truly global superpower with a military budget more than ten times greater than those of the next two largest spenders. The second tier includes those NATO countries that have large defence budgets, albeit much smaller than the U.S., but are also able and willing to project significant military power abroad. These countries are the U.K. and France, who are also permanent members of the Security Council and are able to carry out minor military operations in their spheres of influence thanks to considerable overseas military presence and an inclination for foreign intervention.  The third and last tier is made up of an admittedly varied array of NATO members in terms of defence budget size (both in absolute and relative terms). Even the most powerful of these countries, namely Germany and Italy, are extremely unlikely to mount unilateral or offensive military operations without U.S. leadership because they are ontologically wary of aggressive intervention abroad.

The defence budgets of these countries and the remaining 23 member states are arguably more geared towards self-defence, perhaps because NATO’s most powerful pull-factor was always Article 5 of the North Atlantic Treaty. Therefore, at least financially, NATO will keep existing as a multiple-tier alliance for as long as budget guidelines are not made compulsory by an actual treaty that ensures that burden sharing is spread fairly between all members according to their GDP. Furthermore, U.S. leadership should not expect all allies to be willing to participate in hard combat operations that they believe do not reflect their national interest (see Germany and the Libya operation of 2011). Ontologically speaking, then, NATO is bound to remain an alliance where a handful of Member States feel compelled to embark on offensive hard combat missions and the vast majority who are quite content with the defensive element of the North Atlantic Treaty.

Endnotes:

[1] NATO, Press Release – Defence Expenditures of NATO Countries (2009-2016)

[2] Tecau, J. (2015), The politics of 2 Percent: NATO and the Security Vacuum in Europe. Carnegie Europe ; NATO, Press Release – Defence Expenditures of NATO Countries (2009-2016)

[3] Pavgi, K. (2015), NATO Members’ Defence Spending, in Two Charts. Defence One ; Perlo-Freeman, S; Flreurent, A; Wezeman, P; Wezeman, S. (2016), Trends in World Military Expenditure, 2015. Stockholm International Peace Institute

[4] Perlo-Freeman, S; Flreurent, A; Wezeman, P; Wezeman, S. (2016), Trends in World Military Expenditure, 2015. Stockholm International Peace Institute

[5] NATO, Press Release – Defence Expenditures of NATO Countries (2009-2016)

[6] Goldberg, J. (2016), Obama Unhappy with Allies, Upset at Free Riders. Atlantic Council

[7] U.S. Department of Defence, Obama: U.S. Commitment to European Security is Unwavering in Pivotal Time for NATO (2016)

[8] NATO, Wales Summit Declaration Issued by the Heads of State and Government participating in the meeting of the North Atlantic Council in Wales (2014)

[9] NATO, Wales Summit Declaration Issued by the Heads of State and Government participating in the meeting of the North Atlantic Council in Wales (2014)

[10] Majumdar, D. (2016), Will NATO Really Boost Defence Spending at Warsaw? The National Interest

[11] Stanley-Lockman; Wolf, K (2016) European defence spending in 2015: The force awakens. European Union Institute for Security Studies

[12] Pavgi, K. (2015), NATO Members’ Defence Spending, in Two Charts. Defence On

[13] Tecau, J. (2015), The politics of 2 Percent: NATO and the Security Vacuum in Europe. Carnegie Europe

[14] Tecau, J. (2015), The politics of 2 Percent: NATO and the Security Vacuum in Europe. Carnegie Europe

[15] Majumdar, D. (2016), Will NATO Really Boost Defence Spending at Warsaw? The National Interest

[16] NATO, Press Release – Defence Expenditures of NATO Countries (2009-2016)

[17] Tecau, J. (2015), The politics of 2 Percent: NATO and the Security Vacuum in Europe. Carnegie Europe

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