Putin Has Eastern Europe Hearing Trump's Call to Arms

The region is notching NATO’s biggest spending gains
From

Proximity to Russia is bolstering defense expenditure across eastern Europe, right at a time when Donald Trump is signaling U.S. military backing could depend on those nations paying their way inside NATO.

Romania, Lithuania and Latvia – mindful of shared land and maritime borders with their former Soviet master – are behind this year’s biggest advances. Other front-line countries such as Estonia and Poland also spend more proportionally than western members, meeting or surpassing the 28-nation alliance’s guideline of allocating 2 percent of economic output.

Those that feel “most exposed” to the threat from Russia “are generally more ready to boost their defense budgets,” Tony Lawrence, a research fellow at the International Centre for Defense and Security, said by email. “The Trump administration is merely following – albeit more aggressively – a long-standing and not entirely unfair American complaint that European allies aren’t pulling their weight.”

Eastern Europe was jolted when President Vladimir Putin annexed Crimea from Ukraine in 2014, and Trump’s remarks haven’t been forgotten despite assurances of continued U.S. support from elsewhere in his administration. While Russia often denies it has designs on places such as the Baltics, ties with those countries remain frosty. Elsewhere, in Hungary for example, relations with Putin have improved and defense expenditure has grown by less.

Lithuania, which borders the Russian exclave of Kaliningrad, has said Trump is right to highlight Europe’s underspending. It’s going further than most, eyeing a hefty 2.5 percent of gross domestic product for its military by 2020.

Still, countries have to increase spending faster than economic growth to reach NATO’s 2 percent target. Germany boosted defense spending on the year by 2.7 billion euros, more than the current total defense spending by Estonia, Latvia and Lithuania combined, to reach 1.22 percent of GDP, a gain of 0.03 percentage points.

– With assistance from Andra Timu, Patrick Donahue, Corina Ruhe, Maciej Martewicz, Ott Ummelas, Dalius Simenas, Edith Balazs & Esteban Duarte

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE