NATO started as an organization that focused on a defensive military alliance of the members to combat aggression—particularly from the then Soviet Union. But things change. The so-called war ended, and the focus of NATO became less designed. Emphasis is still placed on defense spending. Members generally agree that the member countries of NATO should reach spending levels of 2% of GDP.
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Trump has called out Germany, in particular, saying there can be “no more games,” if the alliance is going to work (Germany is below the 2% margin). He also criticized Germany’s gas pipeline deals saying the Russians are getting rich over these deals. He also called for a 4% GDP.
Since the end of the cold war, NATO countries have cut defense budgets as tensions fell. Although Russian methodology has changed—there are less rumbling war machines and increased cyber attacks– this has led to an increase in pressures across the world.
The United States has also independently increased its military presence in European countries thereby lessening reliance on NATO.
Although we do not think Trump is trying to “tear down” the 29-member alliance as some have alleged after the President’s remarks, we do believe that the emphasis should be on getting the members caught up to 2%. The real deal will be contained in the fruits of Trump’s negotiations with Putin. If nothing substantive issues from these discussions, we can expect more decades NATO flutterings.