Vice Admiral James Foggo, III and Rear Admiral Paddy A. McAlpine speak to Swedish media during BALTOPS 2016, an annual NATO exercise. Via Wikimedia Commons.

The Problem with Europe Paying its Defense Bills

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by Matthew Fay
 
One of the main foreign policy talking points of President Donald Trump’s campaign was that America’s allies—particularly its European allies—were not paying enough for their own defense. As then-candidate Trump told the New York Times, NATO members needed to start “paying their bills,” otherwise the United States would need to reconsider its alliance commitments.
Concern about NATO member states not investing enough in their own military capabilities is not a new problem and predates the Trump presidency by several decades. But the emphasis Trump has placed on the issue—going so far as to threaten withholding defense of countries that do not meet minimum spending requirements—raises several interesting questions. Two of them stand out in particular: can America’s European allies increase their defense budgets? And if so, is it a good thing if they do?



As discussed here previously, realist international relations theory suggests that states “balance” against threats. That is, states under threat will either convert their own economic resources into military capabilities or form alliances with other countries under threat to combine their capabilities. Since the end of the Cold War, America’s European allies have faced minimal external threats. They have also had a security patron in the form of the United States. Realist theory would suggest that European military spending might increase given heightened sensitivities over Russian activities on the continent’s eastern flank, except for the fact that an outside security provider—the United States—alleviates the need from European states to do so.
However, there is a school of thought within realism known as neoclassical realism that suggests that states might fail to balance against external threats. Known as “underbalancing,” this neoclassical realist theory suggests that failure to balance stems from domestic factors. There are therefore reasons to believe that even the Trump administration’s threat to remove America’s security guarantee to its European allies might not be sufficient to produce an actual boost in European defense spending.
Writing at the Washington Post’s “Monkey Cage” blog, Andrea Gilli—a postdoctoral fellow at Stanford University’s Center for International Security and Cooperation—identifies some of the domestic barriers to European states investing in their militaries. Gilli names three main constraints on the ability of European states to balance, but two of them are particularly important. The first is the inability of many European states to contribute financially to their own defense. Some European states simply do not have large enough economies to adequately invest in military capabilities. Gilli notes that Estonia is one of the few European countries to meet the minimum standard of defense spending for NATO member states—two percent of gross domestic product—but that still only amounts to $500 million in defense expenditure. Larger states have greater financial resources to invest, but they are tied up in welfare programs. As Gilli writes,

[C]utting welfare state provisions in Europe to fund defense expenditures is going to be extremely difficult, if not counterproductive.

On the one hand, those who receive these benefits are far more numerous, and thus politically more influential, than those receiving a direct benefit from military spending. On the other, cuts in welfare spending risk actually bringing additional support to anti-establishment parties like the Five Stars Movement in Italy, Die Linke in Germany or Podemos in Spain — all of which have strong anti-defense stances.

It is possible European states could combine their military capabilities, but as Gilli argues, that option is also problematic. He notes,

With Europe’s limited funds to spend on defense, large cooperative projects will be difficult to launch. In the past, countries in Europe abandoned cooperative projects because of their negative domestic implications for jobs, technological know-how or military exports. In an age of austerity, amid a refugee crisis and high youth unemployment, this mind-set is unlikely to change anytime soon.

And some countries may have little interest in cooperation. They may operate in completely different environments — Mediterranean vs. North Sea, for example. Or they perceive a different strategic threat at home — think Russia vs. the Islamic State. Some countries may even have a strategic interest in leaving unaddressed some capability gaps — to compel proximate allies to come to their defense. This was Finland’s military strategy during the Cold War.

The European Union is also unlikely to force member states into a cooperation arrangement, according to Gilli. Given the rise of nationalist populist parties across Europe, any such assertion of power from Brussels will likely create a greater backlash.
The two reasons Gilli notes for the inability of European states to increase defense spending also raise another question: should the United States want European states to do so? Writing at the end of the Cold War, political scientist John Mearsheimer warned that a Europe free from superpower domination would return to its recurrent patterns of interstate warfare. Europe’s major states would be forced to pay for their own defense absent American and Soviet security guarantees. To convince domestic populations to support investment in military capabilities—likely at the expense of welfare spending—state leaders would likely lean on nationalist rhetoric and policies. According to Mearsheimer, the reason they have not had to do so was because the American “pacifier” has remained in place even after the superpower standoff in Europe ended.
An American withdrawal as an effort to induce greater defense spending in Europe might lead to the empowerment of the very nationalist populist parties that would like to see the European Union dismantled. The disintegration of Europe—coupled with increased spending on military capabilities by its largest states—could lead to the return of security competition and the dilemmas inherent in it. Meanwhile, smaller states—Estonia just being one example—unable to invest sufficiently in their own defense will be subject to manipulation and domination by the continent’s major powers.
So the question of whether the Trump administration should consider withholding defense of America’s European to encourage them to “pay their bills” hinges on two things: whether they can, and if so, whether doing so is worth potentially undermining the peaceful integration of Europe