default of two percent
NATO countries agree on new defense spending target
7/7/2023, 6:55 p.m
Despite a sharp increase in the defense budget, Germany is falling short of the NATO target of spending 2 percent of its GDP on defense. Following a decision by the 31 members of the alliance, this reference value will now become a binding specification.
In view of the threat from Russia, the NATO countries have agreed to tighten the common target for national defense spending. The 31 alliance members want to spend at least two percent of their gross domestic product (GDP) on defense in the future. The German press agency learned this from alliance circles after the conclusion of a written decision-making process in preparation for the NATO summit next week.
The previous goal only stipulated that all allied states approach the benchmark of spending at least two percent of their GDP on defense by 2024. It was adopted at a summit in Wales in 2014.
For Germany and almost 20 other NATO countries, the new target means that they will have to significantly increase their defense spending in the coming years. The Federal Republic recently increased its expenditure relevant to NATO by ten percent to around 64 billion euros. So far, however, the alliance has fallen far short of its target. According to current comparative figures, NATO estimates that Germany will achieve a quota of 1.57 percent this year.
With the help of a special fund for defense amounting to 100 billion euros, which was decided in the previous year, the two percent quota is now to be reached in 2024. However, it is unclear how things will continue once the special fund has been used up. According to a study by the German Economic Institute (IW), the share of GDP could fall back to below two percent as early as 2026.