27 Mar 2017

Germany Owes NATO €347 billion, According to Trump

Donald Trump wants Germany to pay a €347 billion bill which the country “owes” to NATO, a Times publication revealed. The newspaper cited unnamed sources claiming that President Trump handed Angela Merkel a bill which apparently estimate the price of the US military’s services in the Alliance. The White House denied the existence of such an invoice, however, several times, Donald Trump scolded other NATO allies for not paying enough and claimed that, especially, strong members like Germany need to increase their input. Additionally, he also tweeted that Germany owes “vast sums of money to NATO”.

In January, this year Trump called NATO “obsolete” because it “wasn’t taking care of terror” and expressed that is “very important” that 28 defense affiliates need to pay their fair share. He then determined the current situation as “very unfair to the United States” and insisted that annual membership quota has to be 2% of GDP of the country. That Trump statement provoked the European leaders’ reaction, who were “astonished” by his harsh words and firmly reminded the newly elected president that Europe “does not need outside advice to tell it what to do” (Francois Hollande) and “We Europeans have our destiny in our own hands” (Angela Merkel). Still the memory of the two major NATO allies seem to be a bit short since only 3 years ago, they’ve all agreed to meet the 2% target during the annual summit in Wales. These intentions were confirmed 2 years later in the meeting in Warsaw but only five countries have actually carried out the commitment – the USA, the UK, Greece, Poland and Estonia. Germany currently spends 1.2% of GDP.

Following the recent Times publication, a representative of the German government commented that Trump’s action is “outrageous” and Angela Merkel said that she “will not respond to such provocations”. The paper quotes also the German defense minister Ursula von der Leyen, according to whom, the country has “no debt account at NATO”.

Trumps demanding of “paying” the debts to NATO were criticised by experts, including the US’s former NATO representative Ivo Daalder. “Sorry, Mr. President, that’s not how NATO works. The US decides for itself how much it contributes to defending NATO” he said in his Twitter account.

The current way that members are providing financial contributions to NATO is similar to the United Nations. The USA contributes more the one-fifth and the rest of the allies supply their contributions in line with a cost-sharing formula based on Gross National Income (that is GDP plus income obtained from dividend and interests from other countries). Based on that formula 22% of the NATO budget falls to the USA, 14.65% to Germany, 10.63% to France and 9.84% to Britain. 13 states, most of them joining the Alliance after the changes in East Europe, contribute only 1% to the budget.

For 2017, NATO had €1.29 billion military budget, €234.4 million civilian and the maximum budget for NSIP (NATO Security Investment Programme) was €655 million.

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