Under pressure from US President Trump, the NATO states have agreed on a new distribution of the organisation’s busget. In the future, Germany will pay as much as the USA. That is 33 million euros more annually.
In the future, Germany will bear just as much of NATO’s budget as the USA. Shortly before the anniversary summit in London, the 29 member states of the military alliance agreed to change the ratio of cost distribution. According to the agreement, the US share of community costs will be reduced from the current 22.1 percent to 16.35 percent as of 2021. The German share is to increase from 14.8 percent to 16.35 percent.
The money from the joint fund is used, for example, to finance the Alliance headquarters in Brussels and the military headquarters. Part of the budget is also earmarked for investments in jointly usable infrastructure. How much money a country has to contribute depends on its GDP. With a GDP that significantly surpasses that of all other NATO members, the US contribution, however, is capped.
Additional burden of 33 million euros for Germany
For Germany, the change in the distribution key at constant costs would mean an annual additional burden of more than 33 million euros. The USA, on the other hand, could save more than 120 million euros. This year, the United States will contribute almost EUR 470 million to the budget, which amounts to a total of EUR 2.12 billion, while Germany will transfer only around EUR 313 million.
At NATO headquarters, it is hoped that the agreement on the new financing model will also somewhat defuse the dispute over the much more difficult question of national defence spending. President Donald Trump has repeatedly demanded decisive steps from Germany and other allies to increase their defence budgets and match the 2014 pledge of spending at least two percent of GDP on the military by 2024.
NATO summit on Tuesday in London
According to NATO figures, German defence spending currently stands at around 47 billion euros, which is estimated to represent 1.39 percent of gross domestic product. By 2014 it had reached around 35 billion euros (1.18 percent). By way of comparison, the USA has reported defence spending of more than 730 billion US dollars (660 billion euros) or a quota of 3.42 percent for 2019. Chancellor Merkel and Defence Minister Kramp-Karrenbauer have pledged their commitment to reachign the 2% goal – until the early 2030s.
All 29 heads of state and government are expected to attend the two-day NATO summit in London on Tuesday – including German Chancellor Angela Merkel, US President Trump and French President Emmanuel Macron, who recently described the Alliance as “brain dead”. The French governemnt commented that the topic of cost distribution is absolutely subordinate in the current situation. The question of transatlantic relations or how to deal with NATO ally Turkey had to be discussed first and foremost.