Europe’s Defense Spending to Rise as Global Threats Proliferate

Donald Trump’s arrival and Britain’s departure are finally pushing the European Union to agree on increased defense spending and greater cooperation between their armed forces.

Leaders of EU countries meeting in Brussels on Thursday are calling on all of the bloc’s members to do more to ensure their security, according to a draft statement obtained by Bloomberg. They’ll also discuss French-German proposals for closer military ties between member states in areas such as planning and procurement.

“Western European defense spending increased for the first time since 2009 and we expect growth to continue to strengthen over the next decade,” Fenella McGerty, analyst at IHS Jane Defence Budgets, said. Fueling the shift are an “increasingly uncertain security environment and growing international pressure,” she said in a statement.

Russian President Vladimir Putin’s interference in Ukraine has already led the Baltic nations to double their spending on military hardware. Faced with the arrival of more than 1 million refugees in Europe and terrorist attacks in France and Belgium, countries such as Germany have also decided to boost spending.

U.S. President-elect Trump as a candidate questioned the U.S. commitment to the North Atlantic Treaty Organization and has selected a secretary of state with business ties in Russia. As for the U.K., the Brexit vote is removing an EU member that opposed greater European defense cooperation, fearing it would put British forces under foreign command and undermine NATO.

Merkel’s Backing

“It’s become clear that the European Union needs to streamline its defense structures -- not against NATO, but rather jointly with NATO, within NATO,” German Chancellor Angela Merkel said as she arrived in Brussels. “I hope that we can take a step forward.”

According to French officials, the French-German proposals involve setting up a permanent EU planning staff to oversee military operations. While the EU has run military operations and peacekeeping missions in the Balkans and Africa, the planning operation had to be set up from scratch each time.

The proposals also mirror NATO’s request that all countries spend at least 2 percent of economic output on their military, with 20 percent of that earmarked for hardware. They are also proposing more joint procurement, an annual review of military spending and more aid to smaller countries.

Of the 27 EU members that will be left when Britain leaves, 21 are NATO members. Of the 28 members of NATO, 21 are members of the EU, not counting the U.K. Only five NATO members -- the U.S., Greece, the U.K., Estonia, and Poland --- meet the 2 percent target. France, which is at 1.8 percent, and Germany at 1.2 percent both plan to spend more in the years ahead.

Long Road

The EU’s combined 2016 defense budget of $219 billion is equivalent to 1.3 percent of gross domestic product, which is expected to increase to 1.4 percent by 2025, according to IHS. If all EU countries spent 2 percent of GDP on defense, they’d have additional outlays of $93 billion this year.

European countries vary widely in their military means and policies. NATO member France spends 33 billion euros ($35 billion) a year on its military, and has nuclear intercontinental missiles, the most powerful aircraft carrier outside the U.S. Navy and permanently based troops and warplanes in Africa and the Middle East. Neutral Austria spends about 2.5 billion euros.

— With assistance by Benjamin D Katz