Trump is right: NATO allies are not paying their fair share Dr. Eowyn from JamesFetzerblog

Saturday, January 21, 2017

Trump is right: NATO allies are not paying their fair share

Dr. Eowyn 

Throughout his campaign, President Donald John Trump had said that one of the things he’ll do as POTUS is to make fairer and better “deals” with supposed U.S. allies — in Asia (Japan, South Korea), and in Europe (referring to our allies in the North Atlantic Treaty Organization or NATO).

In the case of America’s NATO allies, they are supposed to pay at least 2% of their GDPs as their “fair share” in defense costs — except they’re not.

Rick Clough reports for Bloomberg, Jan. 18, 2017, that “Donald Trump is right to say America’s NATO allies aren’t paying their fair share,” which you can see in the map below.

Whereas the U.S. pays more than our “fair share” as a member of NATO (3.6% of our GDP), the vast majority of NATO allies pay less than their fair share:

1. Albania: 1.2%
2. Belgium: 0.9%
3. Bulgaria: 1.3%
4. Canada: 1%
5. Croatia: 1.2%
6. Czech Republic: 1%
7. Denmark: 1.2%
8. France: 1.8%
9. Germany: 1.2%
10. Hungary: 1%
11. Italy: 1.1%
12. Latvia: 1.5%
13. Lithuania: 1.5%
14. Luxembourg: 0.4%
15. Netherlands: 1.2%
16. Norway: 1.5%
17. Portugal: 1.4%
18. Romania: 1.5%
19. Slovakia: 1.2%
20. Slovenia: 0.9%
21. Spain: 0.9%
22. Turkey: 1.6%

In all, only four NATO countries pay their fair share:

• Estonia: 2.2%
• Greece: 2.4%
• Poland: 2%
• United Kingdom: 2.2%

Not only are our “allies” not shouldering their fair share, instead leaving it up to the United States, as usual, to fork up more than our share, the North Atlantic Treaty Alliance itself should be mothballed, being a relic of the Cold War against a Soviet Union that no longer exists.

Bloomberg‘s Clough observes:

“He [Trump] reaffirmed his skepticism about the North Atlantic Treaty Organization, and his readiness to make deals with Russia, in European media interviews published last weekend. Trump isn’t famous for his policy consistency, but those positions have held fairly steady — leaving European leaders wondering whether they can still rely on the American security umbrella.

‘Let’s not fool ourselves,’ German Chancellor Angela Merkel said last week. ‘There is no infinite guarantee.’

So Merkel’s Germany, and many other European nations, are boosting military budgets.

[…] the prospect of a European arms-shopping spree is a win-win for suppliers. Investors have noticed: From Raytheon Co. to Lockheed Martin Corp. to Thales SA, defense contractors have hit all-time highs since Trump’s election. […]

Germany, which spent 1.2 percent of GDP on defense last year according to NATO figures, has announced the biggest increase in 25 years — an extra 10.6 billion euros ($11.2 billion) through 2020. France has approved increased outlays for 2017. Altogether, 19 of NATO’s 28 members have boosted military budgets in the past 18 months, according to a Bank of America Merrill Lynch report.

[…] The new administration isn’t all upside for defense contractors. Trump has already called out companies like Lockheed and Boeing Co. for their high prices.”

And both Lockheed and Boeing, even before Trump was inaugurated as President, already made concessions:

• Boeing vowed to build a new Air Force One for less, after Trump complained.
• Lockheed pledged to lower the astronomical $379B cost of F-35 fighter jets, after Trump tweeted about the high cost.

But neo-conservative Bill Kristol whines that he finds Trump putting America’s interests first to be “vulgar, embarrassing and depressing”.

See also “Pence says transition team returning 20 percent of budget”.

H/t ZeroHedge

~Eowyn