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NATO Defense Spending Falls

Despite agreeing to increase defense spending, NATO alliance members’ defense budgets continue to fall. Today NATO published its annual report on financial and economic data related to allied defense expenditures, which confirms the low level of defense spending among alliance members. Most will continue to hold below the 2 percent of gross domestic product (GDP) in defense expenditures that the United States has been urging members to increase for some time now. While some alliance members will at least hold to last year’s expenditures, others will actually spend less in 2015. Only five nations currently meet the 2 percent goal, and only four nations will see an increase in their defense budgets this year.

NATO has published defense spending figures for all allies every year since 1963, but this report comes at a time when an increasingly belligerent Russia continues its aggression against Ukraine and is threatening its neighbors, while existing conflicts with radical Islamic organizations like Al Qaeda and ISIL seem to be enlarging in scope. NATO members agreed to abide by alliance guidelines that state each member should spend at least 2 percent of its GDP on defense, reiterating their commitments in a collective statement issued at the Wales Summit in 2014:

“We recognize that these steps will take the necessary effort and funding,” the statement read. “In light of this, we agree to reverse the trend of declining defense budgets and aim to increase defense expenditure in real terms as GDP grows; we will direct our defense budgets as efficiently and effectively as possible; we will aim to move towards the existing NATO guideline of spending 2 percent of GDP on defense within a decade, with a view to fulfilling NATO capability priorities. We will display the political will to provide required capabilities and deploy forces when they are needed.”

NATO ships

The Swedish submarine HSWMS Gotland, Royal Navy frigate HMS Portland, and a helicopter from Netherlands frigate HNLMS Tromp participate in the first day of the annual Exercise Dynamic Mongoose 2015. The aim of the exercise is to provide all participants with complex and challenging warfare training to enhance their interoperability and proficiency in anti-submarine warfare and anti-surface warfare skills. Sweden is a partner nation participating in this year’s exercise. NATO image

Yet in some cases spending will continue to decline, and only a handful of NATO members even approach the 2 percent target today. Below are the percentages of GDP spent by each member nation in 2014, and the estimated percentage in 2015, as listed in the report. Iceland’s defense expenditures as a percentage of GDP were not included in the report, but other sources put the figure at between 0.1 percent and 0.26 percent, and rising slightly. Overall, according to the report, Europe averaged out to expending 1.5 percent of GDP on defense.

Defense Expenditures as a Percentage of GDP

NATO Member     2014       2015 (Est.)


Albania                       1.4             1.2

Belgium                      1.0            0.9

Bulgaria                      1.3             1.2

Canada                        1.0             1.0

Croatia                        1.4             1.4

Czech Republic          1.0            1.0

Denmark                     1.2            1.2

Estonia                        2.0            2.0

France                          1.8            1.8

Germany                      1.2            1.2

Greece                          2.2            2.4

Hungary                      0.9            0.9

Italy                              1.1             1.0

Latvia                           0.9            1.0

Lithuania                     0.9            1.1

Luxembourg               0.4            0.5

Netherlands                 1.2            1.2

Norway                         1.5            1.5

Poland                          1.8            2.2

Portugal                       1.3             1.4

Romania                      1.4             1.4

Slovakia                       1.0             1.0

Slovenia                       1.0             1.0

Spain                            0.9             0.9

Turkey                          1.7              1.7

United Kingdom        2.2             2.1

United States              3.8             3.6