A Signalling Problem

by Dave Schuler on March 25, 2014

Riddle me this. How does this reality of European defense spending:

At 1.9%, France last year fell short of the 2% that is supposed to be the technical requirement for membership. Mr. Rasmussen’s Denmark spent 1.4% of its GDP on defense, Angela Merkel’s Germany 1.3%, Italy 1.2%, and Spain 0.9%. This is what a country spends if it thinks its main security threat is Belgium.

constitute an argument for greater U. S. commitment to Europe? When you consider all of the NATO countries only four—Estonia, Greece, the United Kingdom, and the United States—spend more than the 2% of GDP guideline for membership in the alliance. Most, like Germany (1.3%), spend less. Some, like Luxembourg (.4%), Spain (.9%), and Canada (1%), spend much less. Some of the free riders, e.g. Luxembourg and Canada, cannot plead poverty. Luxembourg has the highest median household income in the world. The free riders mostly just have other priorities.

In aggregate the countries of Europe have a higher GDP than the United States but their aggregate defense spending is a fraction of ours. I attribute a good deal of the discrepancy to bad signalling on the part of the United States. Take the war in the Balkans as an example.

We had very few interests in the Balkans. Germany, on the other hand, had substantial financial interests, particularly in Croatia. The Germans had been courting the Croats for years prior to Croatia’s declaration of independence. Italy had substantial interests as well, particularly as the refugees of the conflict began streaming across their border. The carnage in Yugoslavia was a mostly European problem that should have been soluble by the Europeans.

When we joined the intervention in the Balkans it signalled to the Europeans that we would provide the military muscle to handle even purely European crises. We have repeated that signal again and again since then. Is it any wonder that our European allies have interpreted our actions as absolving them from any need for paying for their own defense let alone paying for more general European security. They preferred to spend the money on social welfare as who wouldn’t under the circumstances?

We’re in the position of the man who has an enormous pain in his head because he’s pounding his head into a brick wall. The first thing to do is stop.

{ 15 comments… read them below or add one }

... March 25, 2014 at 10:02 am

This is what a country spends if it thinks its main security threat is Belgium.

CORRECTION: This is what a country spends if it thinks its main security threat is their own people.

PD Shaw March 25, 2014 at 10:12 am

I think you might be projecting Dave. A reasonable interpretation of the state of affairs is that the United States wants Europe to be dependent on it for military matters, either because the U.S. wants to be involved or it distrusts European initiatives. I think Robert Kagan goes so far as to argue U.S. policy is to subsidize the European union experiment, with the hopes of avoiding another World War.

Dave Schuler March 25, 2014 at 10:53 am

IMO this is one of greatest areas of divergence between ordinary Americans and American elites. Elites may hold the views you attribute to Americans, generally. I see no evidence that most Americans do.

Contemporaneous opinion polls showed that more Americans opposed operations in the Balkans than supported them just as a supermajority opposed our actions in Libya (mostly a European initiative).

If we’re going to insist that Europe be dependent on us in military matters, we’re going to need to learn to say “no”. Doing otherwise just incentivizes European adventurism which I see as in no way better than American adventurism.

PD Shaw March 25, 2014 at 10:59 am

Its unfortunate that the linked article doesn’t go more into the spending and military capability of the former Warsaw Pact countries. Luxembourg, due to its size and location, would be a free-rider on NATO it it was outside of NATO because guaranteeing the security of the surrounding countries would be an implicit guarantee of its own security in any event. The eastern lands, however, constitute significant, additional security guarantees in an unstable and potentially hostile area. None of the countries bordering Russia, Belarus, or Ukraine should be allowed to fall short of 2%.

PD Shaw March 25, 2014 at 11:04 am

@Dave, I agree about the distinction between elites and the common people, but some times when something isn’t working as intended, its worthwhile to step back and consider that it is working as intended. This sometimes leads to paranoia and conspiracy, but sometimes its true.

For example, I think agricultural subsidies are working as intended (boost exports), but most people think they are not because they think agricultural subsidies are intended to help the “little guy.”

Dave Schuler March 25, 2014 at 11:05 am

The table at the NATO site to which I linked (the source for the WSJ opinion piece) has that information. See Table 3.

Estonia (2%), Latvia (.9%), Lithuania (.8%), Bulgaria (1.4%), Poland (1.8%).

The reason I singled out Luxembourg is its wealth. It really has no excuse.

Dave Schuler March 25, 2014 at 11:10 am

they think agricultural subsidies are intended to help the “little guy.”

I would be happy to document that is the basis on which they have been sold.

I think that agricultural subsidies as a method of boosting exports is a very hard case to make. In real terms our agricultural exports peaked 30 years ago. I think the only viable explanation for our agricultural subsidies is that they’re a method for paying back major political contributors.

... March 25, 2014 at 2:13 pm

[S]ome times when something isn’t working as intended, its worthwhile to step back and consider that it is working as intended.

That can be a useful way of cutting through the bullshit.

michael reynolds March 25, 2014 at 2:53 pm

One of the lessons learned at the end of WW2 was that the UK and France were no longer great powers, and that Germany can not be allowed to be. The scale of things had changed and only the US and the USSR were serious powers, while everyone else lined up on Team Blue or Team Red to endure the Cold War. Germany, (the former Team Black) could only be tolerated so long as the Americans held their leash. Europe was a series of utility players, each with its own role to play, but on a team completely dominated by the US. The new formula for Europe was: the Americans in, the Germans down, the Russians out.

Then Team Red lost decisively. So now the lesson learned was that only the Americans were major players and there was no longer a serious opponent. So why would Europe begin to take defense seriously? Yes, they had the EU, but the EU was a sort of abstraction, not a tangible thing really. It certainly did not constitute Team Green, an independent power. So why would the UK and France, each now happily adapted to being mere secondary players, want to waste resources when the only visible opposition was dead?

And of course Germany had its own issues. The former Team Black was forever disgraced, forever mistrusted. A German defense build-up would be intolerable, not least to the German people.

That’s why this move by Putin was so foolish and self-destructive. Europe now has to consider the fact that Team Red, while not the equal of the US, is nevertheless a potential problem. Europe has a choice: continue to lean on the Americans or let the Germans out of the dog house. If we signal that we want to see more European initiative, it’s also a signal that Germany is to be let off the leash. Name the country that least wants Germany off the leash. Yeah, that would be Russia.

Germany’s economy is much larger than Russia’s. It can outspend Russia all by itself. A Europe united with an unleashed Germany can spend Russia into destitution – just as the Americans did in the Cold War. I don’t know whether Germany is ready to assert itself this way, but it’s evidence of just how asinine this move by Putin is that Germany Unleashed is a serious possibility. Russia’s entire military budget is equal to about 2.6% of Germany’s GDP. Germany could add the entirety of the Russian military budget and still spend less as a percentage of GDP than we do.

Putin risked re-militarizing his country’s most dangerous historic enemy, and why? So he could seize some bases he already owned and was in no real danger of losing. And according to Republicans, Putin is a brilliant chess master. Right. He took a pawn and put his own King in check.

Dave Schuler March 25, 2014 at 4:00 pm

Germany’s economy is much larger than Russia’s. It can outspend Russia all by itself. A Europe united with an unleashed Germany can spend Russia into destitution – just as the Americans did in the Cold War. I don’t know whether Germany is ready to assert itself this way, but it’s evidence of just how asinine this move by Putin is that Germany Unleashed is a serious possibility. Russia’s entire military budget is equal to about 2.6% of Germany’s GDP. Germany could add the entirety of the Russian military budget and still spend less as a percentage of GDP than we do.

All of that may be true but we alone can’t spend both Russia and China “into destitution” on while we spend a trillion on healthcare, another trillion on education, and another trillion on pensions, getting less value for our money than any other developed country without doing serious damage to ourselves.

If you’re still afraid of Germany, fine. Germany isn’t the only European country. Europe needs to step up to the plate and pay for its own defense for a while.

Andy March 25, 2014 at 7:12 pm

Yes, some of the cuts the Europeans are making to their military forces are pretty drastic. On the other hand, they don’t need significant forces purely for national defense. On the other…other hand, the current low (and declining) numbers of personnel and equipment mean those nations have very little ability to do much outside their own borders.

Dave Schuler March 25, 2014 at 7:30 pm

Only France and the UK have the ability to project power beyond their own borders—they have the only forces other than ours and maybe Canada that are at the highest level of readiness. By the time our NATO allies geared up to mount a defense (without substantial assistance from us) Putin’s grandchildren would be graduating from high school.

Stonetools March 25, 2014 at 9:20 pm

Dunno. Hitler seemed to rebuild pretty fast after the 1933 election. Germany could ramp up faster than you think, if they were frightened enough.
If Russia goes ahead and takes Ukraine, expect Poland in particular to massively increase spending.

Dave Schuler March 25, 2014 at 9:31 pm

Armies aren’t what they were 80 years ago. You don’t just field semi-trained draftees any more. Officers’ corps capable of dealing with modern warfare aren’t generated spontaneously. Arms companies aren’t sitting around with lots of inventory. Orders are placed years in advance.

michael reynolds March 26, 2014 at 12:11 pm

The Russians do field semi-trained draftees. We don’t.

This is all in the speculative and extremely unlikely category, but the fact is ground forces simply cannot move unless there’s dominance of the air. The Russians would have very little chance of managing that against European let alone American air power. Western air forces could be moved pretty quickly to military and civilian air facilities in the Baltics. The Navy would be slower getting carriers and subs on station, but if it came down to it we could very likely control the air space.

Again, look to how well Russian weapons systems have performed in proxy wars against US-armed opponents. Our planes beat their planes, our countermeasures beat their missiles, our tanks beat their tanks, and in a little-remarked but I thought very interesting revelation from Iraq, even our armored personnel carriers beat their tanks. If the war became generalized the Russian fleet would be on the bottom within 24 hours. Russia’s troops are poorly trained and they haven’t fought an actual war in a very long time, whereas we and our allies have quite a lot of very experienced officers and NCOs.

It would not go well for the Russians.

The question is less could we than would we.

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