Take a quick look at this graphic at Visual Capitalist and then explain to me how countries (like Germany, Spain, Netherlands, and Belgium) that can’t scrape up 2% of GDP will manage to spend 5% of GDP on defense? This is after two years of the threat posed by Russia’s invasion of Ukraine.
It should be noted that some countries are spending in excess of 3%, notably Poland, Lithuania, Latvia, and Estonia. What could possibly explain that? Unfortunately, their aggregate GDP is less than that of Spain.
My answer is that our European allies are much more skilled at issuing press releases than they are at expanding defense spending.
Bonus question: how much will Germany and Italy need to spend to bring their militaries up to an adequate level of readiness and preparedness?
One has to review the fine print. The 5% is 3.5% spending on the traditional definition of defense spending (weapons, soldiers, bases) and 1.5% on “defense and security related” items like cyber-security, strengthening the “defense industrial base”, etc.
I actually think the Germans / French / Canadians may hit the target. First their antipathy towards Trump is palpable, and a credible military is a pre-requisite to being able to say “no” or chart an independent course. Second, German industry is hurting due to losing China as a export market and China ruthlessly competing against German exports all over the world and even in Europe; military spending subsidizes the industry instead of letting it become a rust belt.
The Canadian papers have details since Canada is signing an agreement with the EU to be part of their “re-arm” program. Looks like a classic “Buy EU” industrial program.
Losing the Chinese market was a foregone conclusion for multiple reasons. One reason was that the Germans were building factories for the Chinese (sometimes referred to as “factory in a box”). The Chinese paid attention.
A second reason was that the Chinese leadership doesn’t want to import or, perhaps more accurately, they only want to import raw materials.