Taps Coogan – August 3rd 2021

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Enough of 2021 is now in the books for NATO to estimate each member’s military spending relative to GDP for the year. The result is the following chart, from Statista.

NATO is supposed to be a military alliance of countries with militaries not only capable of meeting their own defense, but of providing military assistance to other NATO members in need. The manifestation of this idea has long been the expectation that NATO members spend at least 2% of GDP on their defense budget, a rule that all members committed to formally in 2014.

In practice, NATO has long been a tool for wealthy European member countries to free-ride on the defense spending of a few countries, primarily the US. Wealthy and highly industrialized Germany, for example, refuses to meet its 2% defense obligation yet complained bitterly when the last administration proposed a modest reduction in the number of US troops stationed in Germany at great expense to the US taxpayer. In a related note, Germany is nearly finished building its Nord Stream 2 natural gas pipeline with Russia, a pipeline whose only practical purpose is to reroute gas flows away from Ukraine. Remember, the EU already has massive excess natural gas import capacity (about 150 bcm), nearly 50% more than all of Germany’s imports in 2019.

While there are a few other NATO members that meet their defense spending obligations (the UK, France, Poland, Romania, Greece, the Baltic states, and Croatia), the reality is that the US remains the de facto defense guarantor of Eastern Europe while simultaneously becoming the defense guarantor for nearly all of East Asia vis-a-vis China’s expansionist efforts in the South China Sea and Taiwan. Much like the US protectorates in Europe, Taiwan Spends less than 2% of GDP on defense.

Woe to the American taxpayer.