Two percent target now achieved
Berlin reports NATO record amount of defense spending
February 14, 2024, 7:19 a.m
The two percent target for defense spending has been around for a long time – and has been ignored by Berlin for a long time. However, Germany can now report a record amount of defense spending to NATO. A number of other NATO countries also meet the target.
For the first time in three decades, Germany has reported to NATO planned defense spending of two percent of gross domestic product. The federal government submitted an amount for the current year that, when converted into comparative figures from the defense alliance, corresponds to a sum of 73.41 billion dollars. In absolute terms, this is a record value for Germany and, according to the current NATO forecast, would mean a GDP ratio of 2.01 percent.
In the past, according to documents from the NATO archives, Germany last spent two percent of its gross domestic product (GDP) in 1992. During the Cold War years the rate was usually over three percent. The development of NATO countries’ defense spending will be discussed this Thursday at a meeting of defense ministers at the alliance headquarters in Brussels. About 20 of the 31 NATO countries are expected to reach the two percent target this year.
Increase of more than 20 percent
The new figures correspond to an increase in defense spending of more than 20 percent compared to the previous year, according to NATO circles. The last public report on defense spending by the alliance states only gave a comparative figure of $56.64 billion and a GDP ratio of 1.57 percent for Germany for 2023. In the coming report, these figures will be revised upwards.
With the drastic increase in defense spending, the federal government is reacting in particular to Russia’s invasion of Ukraine. By significantly strengthening deterrence and defense, Kremlin chief Vladimir Putin should be made clear that an attack on a European NATO country would have no chance of success. According to the Ministry of Defense, the money will be used to finance, among other things, new infantry fighting vehicles, frigates, submarines and state-of-the-art F-35A multi-role combat aircraft
The numbers could also be helpful with a view to a possible re-election of Donald Trump in the US presidential election in November. The Republican made it clear during a campaign appearance at the weekend that he would not provide American support to allies with low defense spending in the event of a Russian attack. During his term in office from 2017 to 2021, Trump had repeatedly complained about what he considered to be too low defense spending by European allies and at times even threatened that the USA would leave the alliance.
The new two percent target
NATO’s current defense spending target requires alliance members to permanently invest at least two percent of their gross domestic product in defense annually. It was decided last summer in the face of threats from Russia. The target that was valid to date only stipulated that by 2024 all alliance states should approach the benchmark of spending at least two percent of their GDP on defense. At the 2002 NATO summit in Prague, the NATO states set the two percent target and set this target at the 2014 summit after the Russian annexation of Crimea. Germany was represented by the then Federal Foreign Minister Frank-Walter Steinmeier.
NATO plans to present a new public overview with data on member states’ defense spending in March. It will then also show how high the estimated German defense spending is in current prices. The internal preparatory documents for the Defense Ministers’ meeting this Thursday only contain the inflation-adjusted comparative figures in US dollars.
The massive increase in German defense spending is currently made possible by the Bundeswehr’s special fund worth 100 billion euros. However, this is expected to be used up in 2027. Defense Minister Boris Pistorius is therefore urging that a plan be quickly developed as to how Germany can achieve NATO’s targets in the long term.
However, the SPD politician appears skeptical in the debate about a possible increase in special funds for the Bundeswehr. “I am happy about any suggestion that helps ensure that defense spending is budgeted sensibly and appropriately,” said the SPD politician to the Germany editorial network. “We have the Chancellor’s promise that we will invest at least two percent of gross domestic product in defense by the 2030s,” Pistorius recently told “Spiegel”. The foreseeable expiry of the special fund must be reflected in the financial planning.