Foreign Policy Watch: India-United States

North Atlantic Treaty Organisation’s (NATO) Funding and Summit


From UPSC perspective, the following things are important :

Prelims level : NATO

Mains level : NATO and its fading relevance

What is the news: The U.S. contribution to the North Atlantic Treaty Organisation’s (NATO) operating budget has been cut down at the cost of an increase in Germany’s payments to the alliance. This move comes after repeated criticism of European members of the organisation by the U.S.

  • This will come into effect from 2021, wherein the U.S. and Germany will contribute equally to the NATO budget.
  • In other news, leaders of member states were gathered in London to celebrate the 70th anniversary of the North Atlantic Treaty Organisation (NATO).

Key Points

  • Under the new agreement, the U.S. will cut its contribution to 16.35% of the total NATO’s budget while Germany and other allies’ contributions will go up.
    • The U.S. currently pays 22.1% of the NATO budget and Germany pays 14.8%, under a formula based on each country’s gross national income.
  • France has refused to accept the new arrangement and will keep its contribution the same at 10.5%.
  • All allies have agreed on a new cost-sharing formula under which cost shares attributed to most European allies and Canada will go up, while the US share will come down.


  • Earlier at the 2014 summit, NATO allies had agreed to spend 2% of their GDP on defence.
  • However, the US suggested that countries not only meet their commitment of 2% expenditure on defence but also increase it to 4% immediately.
  • Till 2019, only eight of 29 members are able to spend 2% of their GDP on defence. Germany has also failed to meet this target.

NATO summit: The founding and purpose of the alliance

  • NATO was founded to ensure collective protection for its members — the United States, Canada, and American allies in Europe — against the threat of possible post-War communist expansion and aggression by the Soviet Union.
  • The Soviet Union also formed its own defence and political alliance with Eastern European nations as a counterbalance to NATO — the Warsaw Pact that was signed in 1955.
  • This alliance was disbanded after the dissolution of the Union of Soviet Socialist Republics (USSR) in 1991.

North Atlantic Treaty Organization

  • It is a military alliance established by the North Atlantic Treaty (also called the Washington Treaty) of April 4, 1949, by the United States, Canada, and several Western European nations to provide collective security against the Soviet Union.
  • It is headquartered at Brussels, Belgium.
  • A key provision of the treaty, the so-called Article 5, states that if one member of the alliance is attacked in Europe or North America, it is to be considered an attack on all members. That effectively put Western Europe under the “nuclear umbrella” of the US.
    • NATO has only once invoked Article 5, on September 12, 2001, following the 9/11 attacks on the World Trade Center in the US.
  • NATO’s protection does not extend to members’ civil wars or internal coups.
  • As of 2019, there are 29 member states, with Montenegro becoming the latest member to join the alliance in 2017.
    • France withdrew from the integrated military command of NATO in 1966 but remained a member of the organization. However, it resumed its position in NATO’s military command in 2009.

Relevance of NATO

  • With the collapse of the USSR, NATO lost its essential raisons d’etre, and for most NATO members, the primary concern now is the expansionist ambition of China.
  • NATO has traditionally focused on Russia and the European neighbourhood and recognizes the need to deter “revisionist” and “militarily advanced” Russia, and the threat posed by rogue nations such as North Korea.

Deviance of members

  • Turkey has rejected NATO’s military plan for the Baltic nations against Russia, unless it receives support to defeat Syrian Kurds at its borders, something that France and the US do not agree with.
  • The tensions have come in the backdrop of “Operation Peace Spring” conducted by the Turkish military along the Syrian border in October.
  • During NATO’s Brussels Summit last year, Trump criticised European nations, especially Germany for not spending enough on defence.
  • As per an agreement that was reached in 2014, member nations are supposed to spend up to 2% their GDP on defence on a voluntary basis.
  • Until 2018, the US spends the highest percentage of its GDP (at least 3.5%) on defence, while the Europeans, including the French, the Germans, the Italians, and the Spaniards, spend less than 2%.

Challenges before NATO

  • The great challenge before NATO is its seeming inability to align the diverging priorities of its member nations.
  • France’s priority at the moment is the eradication of terrorism from northeast Syria, while the US under Trump clearly wants to get out of the Middle East and focus more on the military rise of China.
  • The challenge is made stronger by the personalities of the leaders — the Europeans are clearly impatient with Erdogan, and Trump’s unpredictability and repeated attacks on European countries and leaders has not endeared him to them.
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