Who Pays for NATO?

“We pay so much disproportionately more for NATO. We are getting ripped off by every country in NATO, where they pay virtually nothing, most of them. And we’re paying the majority of the costs.”

                                                                                                            Donald Trump

File:160211-D-DT527-007 NATO country flags wave at the entrance of NATO headquarters in Brussels 2016.JPG

NATO headquarters, Brussels, Belgium (Wikimedia: Public Domain)

A cornerstone of Donald Trump’s foreign policy is that most of the 28 member countries of NATO are getting a free ride. Trump has suggested that the U.S. is paying a “totally disproportionate share,” which he has also described as “the lion share’s” of NATO. Trump has even suggested that the NATO nations not paying their share should not be defended by the United States.

Trump’s words seem to suggest that the U.S. is paying more money to NATO than it should because other nations are not paying their share. The answer is more complicated than it first seems.

The issue has two sides. First, there are the operating costs of NATO. NATO’s Common Funded budget is $2.8 billion, which includes the contributions from all NATO countries. That budget is for the operational costs of NATO management. As the White House describes, this Common Funded budget includes “alliance operational costs (such as in Afghanistan or Kosovo); NATO AWACS (see below); training and exercises; joint facilities and infrastructure; common communications; the NATO headquarters and staff; and NATO’s unparalleled multinational integrated military command structure.”

Second, the military forces of NATO are comprised from individual national budgets. Those budgets impact only the country funding its military. What Germany or Hungary allot to their military comes solely from their national budgets, not subsidies from the United States or any other country. According to NATO guidelines, the alliance nations are supposed to fund their militaries with at least 2% of each nation’s GDP.

The United States only contributes 22% of the common budget or about $600-700 million. If the United States’ GDP was used solely as the basis for the common budget, it would contribute more than double what it does now. The other 27 NATO countries combined only have a slightly higher GDP than the United States. Clearly, when it comes to NATO’s budget for funding interests that serve the entire alliance, the United States is not overpaying its share. An argument can be made that the United States is actually underpaying its share. However, there’s a lot more to NATO. No one fights a war without soldiers and weapons. Those come from individual countries.

When individual national defense budget, the numbers are reversed but more complicated than Trump or Bernie Sanders, who claimed that “about 75%” of NATO was paid by the United States. It is true that if all the military budgets of the 28 NATO nations is totaled, the United States represents 72% of that total.

NATO’s 2% of the GDP to the military policy is not upheld by most nations. The United States spends about 3.61%. Only four other countries allocate the 2% minimum: Greece, United Kingdom, Poland and Estonia. Some of the others, like Belgium, Spain, Hungary and Luxembourg spend far less than 1%. There is justifiable criticism that 23 of the 28 NATO nations are not spending the required amount to maintain a military in the alliance. Yet, that does not mean the United States is paying more than its share or more than the alliance’s cost.

The United States has the largest military in the world because it has worldwide obligations. Nearly every other nation in NATO is almost exclusively focused on European defenses. The United States has more military stationed in East Asia than it does in Europe. Add in South Asia, the Middle East, Africa and the Americas, and the 3.61% spent on defense does not constitute an overspending on Europe. Actually, with the United States’ worldwide obligations, it may not be contributing 2% of its GDP to defending Europe.

While it is true that most NATO countries are not living up to their promises to keep their militaries at a required amount of strength, it simply is not true that the United States is disproportionately paying for NATO. The United States appears to be only paying for its required obligations and nothing more. The failure of many nations to pay their share does not cost the United States anything besides weakening the defenses of NATO.

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