Some commentators on Mrs Merkel’s speech to a recent party rally on the subject of defence seem to conclude that she was condemning the USA and the UK for deserting Europe. I think she meant something rather different. She may well have been rattled by the continued reminders from Donald Trump that the European nations have sheltered under the umbrella of US defence spending for far too long.
A couple of years ago NATO met in Wales and agreed that all members should spend 2.0% of their GDP on defence. They agreed to that and then went away and did nothing to keep their promises. Germany is a particular outlier being such a rich country. Surely 2.0% of GDP is a mere fleabite to a country with huge trade surpluses and a budget in credit? Somehow Germany’s history seems to have made it difficult for Mrs Merkel to keep to what she agreed in Newport. Let us look at the statistics, courtesy of Eurostat, the European Union’s official statistical data base.
Of the current 28 member states of the European Union only Greece and the UK spend more than 2.0% of GDP. Greece tops the list at 2.7% but as its GDP is one third below what it was in 2008 and still shrinking this is not a big contribution to the total. The UK comes next at 2.1%. Estonia spends 1.9% but its economy is pretty small. The only other large contributor to the common European defence effort is France at 1.8%. Germany lags behind at a miserable 1.0%.
Worse still, Eurostat estimates that more than half of European defence spending is on employment costs. Spending on equipment and particularly on Research and Development is pretty small. Only the UK and France are substantial spenders in the R and D sector.
When the UK leaves the EU it will leave a big hole. With 14.8% of the EU total economy it represents 25% of its total defence spending and a whopping 40% of EU spending on defence R and D.
The European nations have been hiding under the US and UK (France excepted) defence umbrella for far too long. It is time for them to get real. They say they are going to create a Europe army. First they will have to find the funds to pay not only for some fighters but also for guns, helicopters, ships, tanks and all the other equipment necessary to ensure they can take action if required. That, it seems to me, is Mrs Merkel’s real message – Germany has been the target of Donald Trump’s pointed barbs and she is rising to the bait. If, as seems likely, she is reelected as Chancellor of Germany we should expect a bigger German defence budget.