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Advances in Social Sciences Research Journal – Vol. 11, No. 8
Publication Date: August 25, 2024
DOI:10.14738/assrj.118.17443.
Matthijs, H. (2024). The NATO Members and the Budget Guidelines in the Final Year 2024. Advances in Social Sciences Research
Journal, 11(8). 303-311.
Services for Science and Education – United Kingdom
The NATO Members and the Budget Guidelines in the Final Year
2024
Herman Matthijs
University of Ghent (Universiteit Gent)
ABSTRACT
This study examines the defence expenditures of the NATO (North Atlantic Treaty
Organisation) member countries over the period 2014-2024 and this in relation to
the NATO 2014 summit decision of Wales. The research of this article is to examine
the following points: How has defence spending by the member states evolved in
the period under consideration (2014 – 2024) and more specifically the evolution
to the 2% GDP (Grand Domestic Product) military expenditures; Which states
already meet the second target of the 2014 Wales summit, namely: the 20%
investment in equipment of the national military budget. The current figures are
based on the primary budgetary sources as published by the NATO, namely: the
defence expenditures of NATO countries (2014-2024). (see references).
Keywords: Defence budgets, NATO members, Wales guidelines
INTRODUCTION
The NATO summit of 2014 in Cardiff (Wales – UK), under the Obama-Biden, US administration,
took the decision that the NATO members over ten years (2024!) should spend 2% of their GDP
at defence and 20% of that budget to equipment. These Wales guidelines would make an end
at the long period of savings in the defence budgets and created an answer to the upcoming
threat coming from the Russian federation.
This study concerns the defence figures of the present 32-member states of the NATO, but not
Iceland. Because this country has no armed forces and manages only a small coast guard.
This article examines and compares the defence expenditures between 2014, the Wales
summit, and the year 2024 included. In 2014 there were 28-member states in the NATO. The
last entered states are the following countries;
• Montenegro in 2017,
• North Macedonia in 2020,
• Finland in April 2023,
• Sweden became the 32the member in March 2024.
METHODOLOGY
This study attempts to analyse and to compare the NATO defence figures over the last decade.
The materials of this study are the figures is the 2024 NATO press communication and the
yearly report 2023 concerning the defence expenditure (see references 1 and 3). The advantage
of the use of this NATO figures is the harmonization of the numbers over all the members of the
NATO. This NATO figures are using the same method for the calculation of the defence figures,
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Advances in Social Sciences Research Journal (ASSRJ) Vol. 11, Issue 8, August-2024
Services for Science and Education – United Kingdom
which are coming from the national defence budgets. The NATO 2023 report explains what
defence expenditures are (ref. 1, p. 166 & ref. 3, p. 15):
• it concerns the payments made by the defence national budgets for all the components
of the armed forces: uniformed or civilian personnel. Another remark is the fact that the
outlays concerning the military pensions are also calculated in these figures. Because in
some countries public budgets sometimes are relating these pensions in the military
budget and in other state budgets related with the social security. All the pensions paid
by the government to retired military and civilian employees of military departments
are included in these NATO figures concerning the defence expenditure;
• another additional comment is the fact that the military police forces which used for civil
assignments, are part in the military budgets. This means that some police forces with a
military character, but with civil and judicial services, are part of the military budgets in
these countries. Examples are the following member countries: the Netherlands
(Koninklijke Marechausse), France with Luxembourg and Romania (Gendarmerie), Italy
(Carabinieri), Portugal (Guarda Nacional Republicana), Spain (Guardia Civil) and Turkey
(Jandarma). These means that countries with only civilian police units (f.e. Belgium,
Germany, the UK) are at a budgetary disadvantage comparing with the mentioned other
group;
• also, units as the ‘Coast Guard’ are counting in the NATO calculations of military
expenditures. (f.e. US Coast Guard, Swedish Coast Guard/Kustbevakningen);
• what also is including in these military expenditures are the peacekeeping and
humanitarian operations as well as the outlays for the destruction of weapons. Another
part of these expenditures is the ‘R&D’ (Research & development) payments. This last
remark also applies to the military component of mixed civilian-military activities and
the expenditure on NATO common infrastructure.
Finally, the NATO explains that war damage payments and spending on civil defence are both
‘excluded’ from the NATO definition of defence expenditures.
This study is only based at the NATO publications, because the EDA (European Defence Agency)
report is limited to the EU members and doesn’t contain the same quantity of figures
concerning the defence expenditures. (ref. 2)
WALES SUMMIT
The NATO Wales summit, hold in Cardiff September 5th 2014 (ref. 4 ) contains in point 14 of the
declaration the budget agreement for the next years. The text says as follow:
“We agree to reserve the trend of declining defence budgets, to make the most
effective use of our funds and to further a more balanced sharing of costs and
responsibilities...”
This fourteenth point in this declaration also underlines the importance of our security and the
need for a stronger defence industry across the Atlantic. Therefore, this NATO summit taking
current commitments into account by the following considerations:
• Allies currently meeting the NATO guidelines to spend a minimum of 2% of their GDP
(Goss Domestic Product) on defence will aim to continue to do so. Likewise, allies
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Matthijs, H. (2024). The NATO Members and the Budget Guidelines in the Final Year 2024. Advances in Social Sciences Research Journal, 11(8). 303-
311.
URL: http://dx.doi.org/10.14738/assrj.118.17443
spending more than 20% of their defence budgets on major equipment, including
related research and development, will continue to do so;
• Allies whose current proportion of GDP spent on defence is below this level will: halt
any decline in defence expenditures and aim to increase defence expenditures in real
terms as their GDP grows. Even the declaration says for this second point the aim to
move towards the 2% guideline within a decade with a view to meet their NATO
capability targets and filling NATO capability shortfalls.
In other words, this NATO declaration speaks about a ‘decade’ from the summit year in which
the members have to achieve these guidelines and finally in their budget of the 2024!
THE 2 % GDP GOAL
The first table of this article evaluates the member countries positions in relation to the 2 %
GDP goal. The 31 concerned countries are divided, per year between 2014 and 2024, in five
categories. The first one is the group of countries with a GDP contribution of less than 0,50 %,
followed by the group 0,50 % - 0,95 % GDP share, the category of members with a military
budget effort between 1 % - 1,49 % GDP, the group 1,5 % - 1,99 % and finally the last category
with the goal of the 2% rule.
Table - I: The 2 % GDP goals 2014 - 2024
0 % - 0,49 % + 0,50 % + 1 % + 1,5 % + 2 %
2014 1 8 11 6 3
2015 1 4 16 3 5
2016 1 4 16 4 4
2017 0 5 12 8 4
2018 0 4 13 6 6
2019 0 3 12 7 7
2020 0 1 10 7 11
2024 0 0 6 2 23
Source: own calculations based on the NATO report & press release.
By the start of the Wales declaration in 2014 only three members were in accordance with the
2 % GDP goal, namely: Greece, the United Kingdom and the United States of America. The last
two countries (UK and USA) are traditionally military powers in relation to their history, the
present surface of these states and their nuclear capacity. The Hellenic republic has a high
defence GDP share because of the Turkish threat in relationship with the political situation on
the island of Cyprus.
Certainly, from the year 2020 the number of countries in accordance with the Wales summit
goals increased. At present there are no countries anymore under the 1% GDP and large
majority has reached the 2% GDP goal.
The second table of this article gives the average of the military expenditures comparing with
the national GDP ‘s of all members.
The year 2017 was the lowest point, since that year the military budget efforts were in a line
up. At present the NATO average is higher than in the starting year 2014.