NATO’s Make-or-Break Moment

NATO leaders began meeting in Wales Thursday for a high-stakes conference dedicated to finding ways of countering Russian President Vladimir Putin’s ongoing military intervention into Ukraine and open contempt for the post-Cold War order. In the run-up to the summit, NATO leaders have talked tough about punishing Putin to prevent him from moving deeper into Ukraine. But it’s not clear whether European allies will back up that tough talk with the financial commitments necessary to rejuvenate a faltering military alliance that Putin has openly mocked as a paper tiger.

Since the end of the Cold War, NATO has been in search of a mission. It has served as an umbrella for operations in Iraq and Afghanistan, but as its historic job of confronting the Soviet Union faded from view and a series of economic crises battered European economies, few American allies were willing to shoulder their shares of the alliance’s financial load.

Now, potential missions are everywhere. Beyond Ukraine, the Islamic State is threatening to expand its fight to Turkey, a NATO member. The alliance is also committed to keeping thousands of troops in Afghanistan, despite the political gamesmanship that has prevented the country from installing a new president. Russia, meanwhile, has tens of thousands of troops massed along its border with Ukraine. It is backing separatists along three fronts, and sent a Russian column into one front late last week. Russia’s support of the rebels has given the separatists the upper hand against Ukrainian security forces struggling to hold territory in eastern Ukraine.

Yet even with open combat in a country bordering several NATO members, the summit is likely to be dominated by dollars and cents. For years, top officials in the Bush and Obama administrations have angrily called on Europe to spend more on defense so Washington wouldn’t be responsible for the lion’s share of the alliance’s funding. Taken as a whole, the defense budgets of NATO members are down some 20 percent in the last five years. Only three European NATO members — the United Kingdom, Greece, and Estonia — meet the alliance’s threshold of spending 2 percent or more of their GDP on defense.

In an interview with Foreign Policy, NATO Deputy Secretary-General Alexander Vershbow, a former U.S. State Department official, said NATO’s response to Putin’s aggression needed to include significant new financial commitments from Europe.

"The credibility of the alliance will be measured by the credibility of the pledge" to spend more on defense, Vershbow said. "NATO needs to send a message that we’re taking the Russian threat very seriously."

In 2011, then-Secretary of Defense Robert Gates said that the alliance faced "collective military irrelevance" without an increase in European defense spending. In June, as the Ukraine crisis raged on, Defense Secretary Chuck Hagel warned that Europe had to stop playing lip service to defense spending and upgrade out-of-date equipment.

For instance, the Polish air force is still flying Russian MiGs, and has to ask Moscow for parts when they break down. Its second warplane, the Su-22, is in need of upgrades in order to be combat-ready.

The inability of fighter jets from individual NATO members to communicate with one another also complicates coordinated operations. This was on display during the war in Afghanistan, where British jets could communicate with U.S. Navy carrier-based fighters, but could not talk with Air Force tankers.

"We must see renewed financial commitments from all NATO members," Hagel said during a May speech at the Woodrow Wilson International Center for Scholars. "Russia’s actions in Ukraine have made NATO’s value abundantly clear, and I know from my frequent conversations with NATO defense ministers that they do not need any convincing on this point. Talking amongst ourselves is no longer good enough."

In the buildup to the summit, British Prime Minister David Cameron echoed Hagel’s call for European nations to spend more. According to World Bank statistics, the British spent 2.3 percent of their GDP on defense in 2013, or more than $60 billion. That was compared to 2.4 percent in both 2012 and 2011. The United States, even with the defense spending cuts mandated as part of a budget deal with the Republican-led Congress, spent 3.8 percent of GDP on defense in 2013, compared to 4.2 in 2012 and 4.6 in 2011.

By comparison, in 2013, Germany only spent 1.3 percent of its GDP on defense, compared with 1.3 percent and 1.4 percent in 2011 and 2012, respectively. France spent 2.2 percent, down from 2.3 percent in the 2011 and 2012 (NATO disputes France’s 2013 World Bank number. According to NATO, France only spent 1.9 percent of 2013 GDP on defense).  Italy spent 1.6 percent, a drop from 1.7 percent in the previous two years. The Netherlands spent 1.3 percent of its GDP, down from 1.4 percent over the previous two-year period.

In Germany, home to Europe’s largest economy, defense spending went down from $43.8 billion last year to $42.8 billion this year, continuing a downward trend. Since 2012, France has spent $41.2 billion annually on defense, a figure that’s been frozen until 2016.

And there’s little hope that this will change. Ahead of the conference, Ursula von der Leyen, Germany’s defense minister, said that the actual dollar amount a country spends on the military is more important than the percentage of GDP, lowering expectations that the alliance would formally commit to the 2 percent rule.

Meanwhile, Russia is in the midst of a military spending spree. Russian President Vladimir Putin is presiding over what he has said will be a $700 billion military modernization effort over the next six years, though many outside analysts question whether Moscow will actually wind up spending that much money and point out that Russia’s armed forces use equipment that dates back to the Cold War. Even as Kiev and Moscow appear to be approaching a cease-fire, Putin’s actions inside Ukraine and his increasingly belligerent rhetoric have raised concerns in the former Soviet bloc state about what he plans to do with this new military might.

France is doing its part to slow this buildup. Late Wednesday, Paris suspended the delivery of the first of Mistral-class warship to Russia, despite protests from French leaders who argue that the sale of French arms to Russia is necessary to promote growth. It now plans to send the ships in November.

"The president of the Republic declared that, despite the prospect of a cease-fire, the conditions for France to deliver the first warship are not to date in place," François Hollande’s office announced Wednesday.

As of Wednesday evening, NATO is not planning a formal mission in Ukraine. NATO officials have said that they would create a rapid response force of some 4,000 troops, reportedly stationed in Poland, as a counter to Putin. Vershbow and other U.S. officials want NATO to commit more money, but it’s unclear whether there is the political will to do that in Europe. The eurozone’s GDP fell in the second quarter of 2014, and Germany, the EU’s economic engine, is starting to sputter; its economy grew just 0.2 percent in the second quarter, down from 0.7 percent growth in the first quarter.

Vershbow said that without an increase in spending by European allies, the alliance would be undermined. He said that he was confident that the alliance would find its way.

"NATO has shown its adaptability. It has been able to adapt when the security environment has shifted," he said. "Everyone is glad that no one is questioning NATO’s existence."