The Military Expenditures of the NATO Members

This study examines the defence expenditures of NATO’s member countries over the recent years. It makes use of the original budget figures of the states as verified by NATO (North Atlantic Treaty Organization) and published by this military organization. There search of this study is to examine the following points: How has defence spending by the member states evolved in the period under consideration (2010-2019); Which states already meet the targets of the 2014 Wales summit? (2% GDP for defence and 20% of this budget for investment); The current figures are based on the primary budgetary sources as published by NATO, namely: the latest year report of 2018 (NATO, AR) and especially the most recent figures in the NATO yearly press release (NATO, PR-CP).


Introduction
The reasons of these research concerning the military expenditures in the NATO members are the following two types: what's the actual situation of the military spending in these states; -what are the achievements in these states related with the NATO summit goals of Wales in 2014.
This study concerns several items concerning the financing of the defence systems of the NATO member states. The following points are a part of this study:

Results of the Study
The subjects studied, are the following one: -first of all this study starts with an overview of the own NATO budgets, -in the next point this study contains the evolution of the military personnel, -the main subject of this study are the evolution and the achievements concerning the NATO Wales agreement of 2014, -finally this study relates the defence expenditures with the GDP per capita.

The NATO Funding
The NATO has three internal budgets, namely: a civil, a military and an investment budget. The financing of these budgets is based on contributions of the 29 members are based on an agreed cost-sharing formula based on "National Gross Income" (NGI) (NATO,AR,. The civil budget funds the personal expenses, the operating costs and the expenditures of the international staff at the NATO Headquarters. The civil and political headquarter is located at the Belgian capital of Brussels and the military headquarter in the Belgian town of Mons. This civil budget is approved by the "North Atlantic Council" (NAC). The "NAC" is the daily decision making body consisting of the permanent representatives of the 29 member states. In fact these are the diplomatic missions of these members to the NATO. This budget is 202 million euro for 2018. Personnel is the greatest share in this budget (60,40 %) followed by operating / maintenance (28,5 %) and programmes (11,8 %).
The military budget is related with costs of the operating and maintenance of the NATO command structure and other military entities. In practice it's composed over several separate budgets (37! in 2018) and all financed by contributions from the national defence budgets, based to agreed cost-share formulas from the national defence departments. Also this budget is approved by the "NAC". In 2018 this budget concerns 1,3 billion euro. The most important parts of this military budget are: NATO command structure (48,4 %), NATO airborne early warning and control force (20 %) (AWACS), www.scholink.org/ojs/index.php/ape Advances in Politics and Economic Vol. 2, No. 3, 2019 252 Published by SCHOLINK INC. alliance operations and missions (19,1 %), etc.
The third budget of this military organization is the "NATO security investment programme" (NISP) and supports the missions through the delivery of common-funded capabilities. The decrease is particularly noticeable in the larger NATO member states, as can be seen in the next    -Countries spending <40 % on personnel: 7 countries (was 2 in 2010).
-Countries spending > 70 % on personnel: 7 countries (was 6 in 2010). Generally, the conclusion concerning the personal cost is that the members are over the last years in progressive improvement in relation to this item.

Expenditure and GDP
The next in this study are the defence expenditures in relation as a percentage of the GDP (Gross Domestic Product) of the NATO member states. The next Table concerns   In this article we want to try and view the percentages in the above Table 5  On the other side has France still a nuclear capacity and worldwide interests! But there is still an important difference in military spending between this republic and the other European nuclear power: Another numerical and statistical comparison is the median of the GDP shares (NATO, PC-CP, p. 2).
The median of the defence expenditures as a share of the GDP is estimated at 1,63% for the year 2019.

Also this figure is increasing over the last years and is reached by 14 of the 28 states (excluded Iceland).
Bulgaria is very near the present median. But this median is only 4/5 of the NATO guideline of 2% GDP.
The fact that the NATO average (2019, 2,51%) is more than then the guideline of 2%, is explained by the higher defence budget of the United States of America.
The second part of the Wales agreement is the achievement of the 20 % "NATO guideline on defence equipment expenditures". Also this rule is problematic for several countries. But in 2019the NATO (NATO, PC-CP, p. 2, p. 13) estimates that 17 countries are in accordance with this goal. The next Table   gives   The calculation average is 21,6 % and the median amounts 21,9 % for the year 2019. These figures are indicating that this goal is easier to achieve for the members than the 2 % GDP global norm.
Remarkable is that Germany reaches only 16% for this NATO goal. Which is a little improvement comparing the former years. Because of this, the FRG is the only of the four great European/EU players in the NATO which is unable to achieve this equipment goal. Seeing the rosy situation of the German public finances this can be no financial problem.
The figures given above can be used to class the NATO membership into four distinct groups. namely: -7 countries which meet the 2 % of GDP standard and the 20 % investment standard: the USA.   share and this for the ten greatest defence contributors. share in their D.E., going from 0,3 % till over 9 %.
This calculation with the difference in share between the GDP and the defence expenditures of the states in the NATO total confirms again the proportionately higher US military expenses and the clear under budget European and Canadian military budgets.
Between the European NATO states we notice huge differences between the referred parameters. The previous list let see an important difference between the greater European partners. There is a little difference between the two shares concerning Poland and the United Kingdom on the lower side and higher differences in the case of France, Spain, Italy and certainly the federal republic of Germany.

Defence Expenditure per Capita
This article has also the intention to link the foregoing to per capita defence spending. Doing so yields a different perspective on NATO's military expenditure.
The tenth  The ranking in this lists per capita is, naturally, related with the size of the national GDP. But this calculation is not an objective measuring instrument to make the real efforts of the NATO members in relation with their defence budgets. The fact that the USA stays on the first place with the D.E. per capita and this with lower GDP than Norway can be explained through the much higher USA position concerning the NATO 2 % GDP goal. A similar remark also applies Denmark, albeit to a much smaller extent.

Conclusion
In this article we have looked at trends in military spending in the NATO members during this decade.
The first conclusion is still that the US continues to be by far the largest financier of the NATO and is still the greatest military spender. The explanation basically lies with the funding parameter. namely the level of the "GDP" and the military tradition.
On the NATO funding the USA stays the most important contributor, but all by all the European states together are paying the greatest part of these three budgets.
Another item of this article is the military personnel level that has also fallen in recent years. The fall reached the lowest point in the year 2016 and is now increasing, but is still below the figures in the beginning of the decade. Concerning this item there is an European predominance. Another determination is the decreasing of the personnel share in the defence budgets.
The Wales summit goals are in an improving way. Already seven countries reaches the 2% GDP goal.
But there is for a lot of members a long way to go and the 2024 target comes closer. study analyses also the per capita parameter and this confirms the impression created in the previous part of the article. The USA is the largest source of NATO funding and also contributes the most to the defence of NATO territory. In these calculations they see the impact of the higher well fare and GDP's in Western-and Northern Europe.
The latter is certainly a consequence of the problems in the public finances in many countries and also the lack of political interest for defence issues.
There can be no doubt about the fact that the European defence will have to rely on NATO and his North American input and this for the next decades.