European Defense Spending: Is 2% of GDP Enough?

2024-01-16 11:25:11

Defense Minister Grant Shapps believes that spending 2% of GDP on defense is insufficient for NATO countries and calls for this share to be increased. For some European member countries of the alliance, this is already a mission impossible.

Nearly two years ago, with the start of Russia’s invasion of Ukraine, NATO Secretary General Jens Stoltenberg reminded the alliance’s member countries to respect the commitment made in 2014 to get closer in 2025 to 2% of their GDP (gross domestic product) devoted to their defense spending. Now, with the crises in the Middle East and tensions in the Asia-Pacific, this share in defense budgets seems insufficient.

The Luxembourgish exception

In a study on European defense spending in 2024 and beyond, Ecopol takes stock of the year 2023. For ten of the European member countries of the Alliance, the 2% level has already been reached or even exceeded. In the lead, Poland (3.9%), Greece (3.0%), Estonia (2.7%), Finland and Lithuania (2.5% each) and Hungary and Romania ( 2.4% each). The United Kingdom, for its part, spends 2.1% of its GDP on defense.

In a second group (from 1.5% to 2%), France is in the lead with 1.9% ahead of Denmark, the Netherlands and Norway (1.7%), Germany (1.6% ), then the Czech Republic, Italy and Portugal (1.5%). Only five countries do not reach 1.5% of GDP: Slovenia and Sweden are at 1.4%, Spain is at 1.3% and Belgium at 1.1%.

Luxembourg (0.7%) is the only one not to reach 1%, and does not intend to achieve it. At the end of 2023, Luc Frieden, Prime Minister of the Grand Duchy, proposed replacing the 2% of GDP (82 billion dollars in 2022) with 2% of GNI (gross domestic income) which reaches 56 billion dollars, or 1.12 billion dollars spent on defense instead of 1.64 billion.

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