< p>According to the Polish Foreign Minister, Europe is moving in the right direction, but too slow and too late.
To the European members of NATO an additional 56 billion euros per year must be found to reach the alliance's defense spending target.
The Financial Times writes about how much the deficit has decreased in recent years and whether Europe will be able to find the necessary funds, citing a study by the German Ifo Institute.
According to the study, countries that are furthest behind their defense spending target (2% of GDP) also have high levels of external debt and budget deficits. First of all, among them are Italy, Spain and Belgium.
The 32-member alliance's push to increase defense spending in response to Russia's full-scale invasion of Ukraine is adding to fiscal pressure in Europe at a time of low growth, with many countries tightening their budget plans. Economists say it will make it harder for lagging states to close the gap. “, writes the publication.
Last year, the largest defense budget deficit was in Germany (14 billion euros). But it is nevertheless a huge achievement – Germany has halved the gap to the benchmark over the past 10 years, and plans to bring defense spending to the required 2% of GDP in 2024.
The following values of the defense budget deficit can be “boasted” of:
Last year the trio were also among the six EU countries with external debt exceeding 100% of their GDP. At the same time, Italy had one of the highest government budget deficits in the EU – 7.2%, and servicing its external debt this year will cost it more than 9% of government revenues.
Economic consultant Lorenzo Codogno, a former Italian finance minister, said it would be “difficult” for Italy to meet NATO defense spending targets given that its external debt is 140% of the country's GDP.< /p>
“The Russian threat is not perceived as dangerous enough to justify, say, cutting welfare spending to make room for guns,” he said.
In 2023, the United States covered two-thirds of NATO's total defense spending of 1.2 trillion euros, while the spending of all European members of the alliance amounted to only 361 billion euros.
New EU budget rules, which come into force in 2025, will lead to even greater budget cuts as they force countries to comply with severe fiscal restrictions:
According to analysts, at least 10 EU countries will exceed the annual deficit limit, which should lead to sanctions from the European Commission. Although defense expenses in this case will be considered as a mitigating circumstance.
NATO Secretary-General Jens Stoltenberg told reporters on Thursday, March 14, that two-thirds of the alliance's members will reach the 2% target in 2024. He noted that 10 years ago, when a 2 percent defense investment threshold was agreed upon following Russia's annexation of Crimea, there were only three such countries.
Even if the seven European countries that have said they will increase defense spending to 2% this year meet their commitments, the European hole in NATO's pocket will still be 35 billion euros, according to Ifo.< /p>
At the same time, Poland has one of the highest defense spending indicators in NATO – 4%.
Polish Foreign Minister Radoslaw Sikorski noted that in the Russian Federation, defense spending in 2024 will amount to 7% of GDP.
“We are moving in the right direction, but too slow and too late. The Russian economy is already on war footing. European economies need to go into crisis mode at the very least,” the Polish minister emphasized.
Recall that Donald Trump said he would encourage Russia to attack “unscrupulous” NATO allies who, in his opinion, spend too little on defense.
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