December 9, 2019

Does NATO’s New Cost Sharing Arrangement Contribute to Fairer Burden Sharing?

ZUMAPRESS.com/Scanpix
U.S. President Donald Trump, center, holds a working lunch with NATO members that have met their 2-percent financial commitments at The Grove on the sidelines of the NATO Summit December 4, 2019 in Watford, Hertfordshire, United Kingdom.
U.S. President Donald Trump, center, holds a working lunch with NATO members that have met their 2-percent financial commitments at The Grove on the sidelines of the NATO Summit December 4, 2019 in Watford, Hertfordshire, United Kingdom.

Allies recently agreed to a new cost sharing formula whereby European members and Canada will increase their contributions to NATO’s three common funded budgets allowing the US share to decrease. This new arrangement is a consequence of the reluctance of many European nations to spend more on defence and the perceived need to send positive signals to the White House.

Rather than acting as a significant step forward towards fairer burden sharing between the US and the other Allies, this arrangement is more of a symbolic decision for several reasons.

First, it indicates that European Allies and Canada will increase their own burden. This is most welcome, as it signals that those nations have agreed to take on more responsibility for NATO.

Second, the main issue related to fair burden sharing has focused on how much individual allies spend on their national defence and not on common funded NATO budgets. To illustrate the difference, Allies’ total defence spending for 2019 is projected to amount to 1,039.6 billion USD and NATO’s three common funded budgets to only 2.4 billion USD.

Third, the eight European nations that already spend at least 2% of their GDP on defence also will now have to devote more resources to common funded budgets at the expense of their national capabilities and operations. This raises the question of whether the Central and Eastern European nations’ increased burden, compensating for the reluctance of wealthier European nations to increase their defence spending, will actually lead to fairer burden sharing.

Overall, NATO’s new cost sharing arrangement is a zero-sum game, and the alliance will not receive any additional financial resources to adapt to the evolving security environment. At the very least, hopefully it will serve the purpose of signalling the increased commitment of Europeans and Canadians.

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