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The Downside of Europe’s Military Spending

Caroline Rose

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Coordination is good, but so is a happy citizenry.

June is a big month for NATO. A year shy of its 75th birthday, the alliance will host Air Defender 2023, the largest combined air exercises in its history and one of the biggest Atlantic aerial deployments since the Gulf War. The German-led multinational exercises will test trans-Atlantic interoperability with more than 200 aircraft and 10,000 personnel from 24 countries, pulling forces and equipment from hubs throughout Germany, the Netherlands and the Czech Republic, and exploring various avenues of rapid deployment and multilateral coordination between airfields in Eastern Europe. It will also simulate out-and-back missions into the Baltic states. Notably, Air Defender 2023 features new NATO member Finland and applicant country Sweden, and the drills just so happen to coincide with one of the alliance’s largest combined ground exercises, Defender Europe 2023, which will enter its third month of operations in June.

All this activity, however, has overshadowed the fact that NATO member countries are binge-buying military equipment to boost their own defensive commitments at home. A recent study from the Stockholm International Peace Research Institute found that in 2022, Europe witnessed its largest uptick in defense spending since the final year of the Cold War. Europe’s spending spree has now made NATO’s once-lofty goal – having members spend 2 percent of gross domestic product on defense – a floor rather than a ceiling, at least for some members. In fact, as global defense expenditures increased by 3.7 percent, European countries collectively increased spending by nearly 14 percent, the largest spikes coming from Finland, Lithuania, Sweden and Poland – that is, countries directly threatened by Russia.

Their spending pales in comparison to that of Ukraine, of course, which spent 34 percent of its GDP on defense, but it nonetheless shows that they are becoming much more serious about defending themselves unilaterally as well as collectively. NATO coordination has made remarkable strides over the past year, adding a new member, staging massive exercises and considering new battlegroups along Ukraine’s western flank in Romania, Hungary, Slovakia and Bulgaria, and it seems as though its members want to do their part in kind.

Even so, defense and deterrence are expensive, and growing economic uncertainty throughout Europe will complicate the situation. Many organizations, including SIPRI, predict that Europe will steadily increase defense contributions in the coming years regardless of the outcome of the Ukraine war. And though that conflict has rallied much of Europe to the NATO cause, it has done nothing to allay concerns over the cost of living, inflation and access to alternative sources of natural gas for the upcoming winter – all of which are starting to curb European enthusiasm.

Read the rest in Geopolitical Futures.