U.S. military spending in Europe: whatever happened to “Make ’em pay”?

During the 2016 election, Donald Trump repeatedly voiced criticism towards defense spending in Europe. As president, Trump’s administration initially seemed to follow through on this promise: Defense Secretary Mattis gave alliance members one year to ramp up their military budgets to pay their fair share in defense spending. Now that this deadline is about to expire, little has changed. While allies have increased defense spending, they still fall far short of Trump’s goal.

It stands to reason that Europe should be more interested in a United States that reins in military expenditures, reducing debt and deficits, thereby stabilizing an economy intertwined with that of Europe. It also stands to reason to ask if subsidizing European military forces is the right thing to do.

In 2014, President Barack Obama, in response to Russia’s invasion of Crimea, began the European Reassurance Initiative, claiming in a speech in Warsaw, Poland:

“Under this effort, and with the support of Congress, the United States will preposition more equipment in Europe. We will be expanding our exercises and training with allies to increase the readiness of our forces.”

The European Reassurance Initiative (ERI), as part of the National Defence Authorisation (NDAA), was renamed “European Deterrence Initiative (EDI)” in fiscal year 2018. This program is designed to support U.S. military presence in European countries, specifically Central and Eastern Europe. In 2017, the EDI budget increased from $789 million to $3.4 billion to fund an additional Army Armoured Brigade Combat Teams (BTC), at approximately 4,000-5,000 troops, 90 Abrams tanks, 90 Bradley infantry fighting vehicles, and 112 support vehicles.

However, the EDI is not merely an authorization for funding of an American military presence, as it also specifically subsidizes European fighting forces. For instance, Baltic nations such as Estonia pocket several millions of dollars to strengthen airbases. Lithuania is receiving funds to modernize training grounds. The focus on the Baltics is the result of being directly on Russia’s border. Also, Central European nations, as well as Western nations such as Germany profit from U.S. support. Trump’s rants on  “giving money to Germany” (in military aid) have been debunked, as direct American aid in subsidies is negligible. However, the U.S. does spend significant amounts on maintaining military bases in countries like Germany, negating the need for similar bases of their own. Funds, as every economist would confirm, are fungible. As long as Germany spends less on military defense because of the U.S. military presence, American tax money is, therefore, subsidizing Germany.

What is curious is that despite Trump’s tough talk on NATO in presidential debates, he has yet turned his talk into action. In fact, the U.S. Department of Defense met the budget requests of the EDI, which raises spending from $3.4 billion to $4.7 billion: increasing training to improve the “readiness” of troops ($217 million), improving infrastructure ($338 million) and  increased “building of partnership capacity” (which means subsidisation allied country’s military forces) of $267 million, compared to 2017. The U.S. has met the full extent of EDI budget requests three years in a row and that instead of making European countries pay, America increased its military expenditure on the old continent.

According to the policy think tank Rand Corporation, Germany does contribute $1 billion of the annual expenditure for U.S. bases, so it would be erroneous to say that America bears the burden of these expenses on its own. Still, it is important to point out that unlike Japan and South Korea, which contribute 50 percent and 41 percent respectively to the costs, Berlin only covers one-fifth of the total costs. The excess funds are then, instead, used to fund welfare programs, such as higher education (which is virtually tuition-free in Germany).

During Germany’s last election campaign, German Chancellor Angela Merkel promised to increase the military budget to 2 percent of GDP by 2024. This was a promise that her political rivals on the side of the Social Democrats framed as “submitting to Trump.” However, it seems fair to point out that making the American taxpayer indirectly fund welfare programs in Germany, a country not in need of financial aid is a troublesome proposition. European nations can stand on their own two feet when it comes to organizing their defense. If Europe does not feel satisfied with its level of defense, it should have those debates within its own countries, without asking Americans for handouts.

Alternatively, to phrase it differently: if you bankrupt yourself by buying expensive gifts for your friends, just so they stay your friends, then maybe you are doing something wrong.

This article was first published by RealClearDefense.

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About Bill Wirtz

My name is Bill, I'm from Luxembourg and I write about the virtues of a free society. I favour individual and economic freedom and I believe in the capabilities people can develop when they have to take their own responsibilities.

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