“Ultimately, NATO will have to increase its spending, it doesn’t have to do so to keep pace with its competitors for it is already ahead, at the minute. However, it is unsustainable that the United States and a minority of European countries drag other superpowers, namely Germany, along with it.”
While the United States maintains dominance of the geopolitical, military and strategic landscape at the minute – no doubt aided by its mindbogglingly large defence budget.
It is generally widely accepted that this state of affairs won’t last forever. In an earlier piece written by myself, I articulated that one of the biggest threats to American power was the combined strength of its competitors, namely Russia and China. Emboldened by their growing defence budgets, these two powers have tested America’s patience and geopolitical mettle in Ukraine, Syria, Africa and the South China Sea.
China namely has made great inroads in various developing African nations, such as Zimbabwe and Egypt – not to mention its ever-growing and ever-testing construction agenda in the South China Sea. As for Russia, well its annexation of Crimea and the entrenchment and presence in Syria are but to name a couple of examples of geopolitical flexing. Its hard to dispute, America, and NATO’s, principle adversaries are making their moves.
Adversaries are beginning to spend more
So, what does this mean for NATO? It means the United States cannot continue bankrolling it, at least not alone. President Trump made significant headlines when he told NATO to cough up. But all he did was, albeit in his own special way, was demand from NATO what both Bush and Obama also did. And with good reason. Total expenditure for NATO in fiscal year 2017 was US$946bn. And although the defence budget of China stands at around a relatively small $175bn, it has increased by 1450% in the past 18 years – a trend that shows no sign of slowing.
This presents a headache for NATO as American public opinion has slowly been trending away from increasing spending on the military, a trend that shows no sign of rearing its head within China and Russia, in fact quite the opposite is the case in these countries.
This means that, ultimately, NATO will have to increase its spending, it doesn’t have to do so to keep pace with its competitors for it is already ahead, at the minute. However, it is unsustainable that the United States and a minority of European countries drag other superpowers, namely Germany, along with it. Any increase in NATO spending is unlikely to come from the United States, such increases are beginning to be unpopular with the public and would likely not sit well with the electorate. This being said, the Trump administration has hiked defence spending massively in recent continuing resolutions.
However, long-term, it is my belief – and the belief of many commentators and analysts – that this trend will stagnate or even reverse. This is because President Trump has laid down the gauntlet to European nations – pay more, or we won’t keep paying for you. In essence, he is being rather sincere in his expectation that European nations move closer towards the 2% of GDP goal.
Now it may seem that this article intends to paint the picture that European nations, as a collective, pay very little into the NATO pot and are failing to do anything to rectify it. To redress this imbalance, I would point out that the 2% goal has a deadline, 2024, so there’s time for Germany yet. Not only this, but European nations who historically lagged behind in terms of defence spending are actually beginning to pick up the pace and are trending towards the coveted 2%. This is good news as the threats to NATO are, as I’ve mentioned earlier, ever-increasing.
The United States won’t be the world’s only dominant superpower for very long
But as I also touched on earlier, America’s status as the sole, unchallenged domineer of the geopolitical stage is waning. The emergence of African development creates a new challenge: newly developed nations that the United States has little to no sway over. In the time period spanning the 50s to the 90s the United States exerted its power of nations in Latin America such as Nicaragua, Panama, Columbia, Paraguay, Chile and so on through force and coercion. China, for the most part, has beaten America to the post in Africa – or at least dampened the States’ chances for complete geopolitical supremacy in the region. China’s economic sway and lust for resources gives them significant bargaining power with developing and resource-rich nations. Uncle Sam’s crusades in the second half of the 20th Century made them known as the ultimate neo-colonists, nowadays it is China that holds that title.
To bring this back to NATO, this creates problems because the whole backbone of NATO, what gives it its strength, is the huge reserves of soft power and sway the United States holds – due to its lonesome status as the world’s only true superpower. If we look at history, previously to contemporary times, an international organisation that lacked the United States as a member – or a member of similar size to the United States – failed totally in its goals. (The League of Nations is the principle example of this.) However, this isn’t necessarily the case anymore. ASEAN does not count China, Russia, nor the US as a member state but yet their goals, albeit small, are being achieved.
The fact that the US is trending towards not holding the complete monopoly on dominance is further proof that the USA is slowly but surely becoming just one big fish in a sea of big fish, rather than the only big fish. This may cause problems in the future as NATO, as an alliance, may find itself outweighed and outmatched by other alliances such as the BRICS nations, should they decide to switch their alliance’s focus from economic to geopolitical or militaristic.
It is strategic necessity to more evenly spread the cost of NATO across more countries
The logical and strategic conclusion from all this is that it cannot be left to one superpower to give greater contributions to the organisation than some others, if it is to remain competitive against emerging future superpowers. NATO counts among its members several European countries that will unquestionably find themselves at least close to superpower status in terms of their economic size and potential diplomatic clout. At the moment they aren’t exercising enough if their potential into maintaining a strong NATO geopolitical stance.
The surrender of Syria to Russia shows just how fragile NATO’s ability to maintain its strong presence is. If it is to remain strong enough to effectively counter the rising tide of emerging competitors, other superpowers will have to wade in to lift the organisation from the future mud sty it may find itself in the future – where it might be much more difficult to maintain stability in dominance in current affairs.
They prefer to put their money into PESCO…..
…. As do the Tories
Yep, because Corbyn is such a war hero and I imagine will instantly transform our forces into a superpower…
/s
Also the UK is not signed up to PESCO as such it is signed up to a co-operation with it as a third party state. PESCO also does not negate the need to spend money on defence as it is only as effective as its members.
A little more spent on flying time and training might be helpful…
http://www.dailymail.co.uk/news/article-6036813/Spanish-fighter-jet-accidentally-fires-missile-In-Estonia.html
Cheers!
At least the mail got the image right, the report I saw (I forget where) pictured a Luftwaffe Typhoon.
My expat Eastender friend Keith calls it “The Daily Chav”… Yet he seems to know so many of these folks….
😀
“… drag other superpowers, namely Germany, along with it. ”
Really? Germany a superpower with only 4 out of its 128 Typhoons combat ready, and a large part of its Leopard II tanks unserviceable?
It more a reference to its economic power not its military power.
Still wrong though Lee
I justify my reference of Germany as an economic superpower with it being the 2nd largest economy in NATO and the largest economy in Europe. It is one of the fastest growing large economies in the world as well as one of the most modern. I personally believe that Germany is one of the world’s true economic heavyweights and, as such, an economic superpower. You’re entirely right about its military – it probably as a country has one of the largest disparities between economic and military strength in the world, something I argue needs to change in my article.
“this article intends to paint the picture that European nations, as a collective, pay very little into the NATO pot and are failing to do anything to rectify it. To redress this imbalance, I would point out that the 2% goal has a deadline, 2024, so there’s time for Germany yet”
There is no NATO pot. NATO is an alliance and members are urged to spend a certain percentage of GDP on defence. But this idea that America is spending money to protect Europe is not true. America chooses to spend 3.6% of GDP on defence. Other’s don’t, but even if they did the USA would not reduce its spending.
Admittedly, I would like all countries in NATO to make firm commitments to hitting the 2% target, but if people think it will somehow allow the USA to cut defence spending they are deluded. Fewer than 5% of America’s military is deployed in Europe.
You are totally mistaken. The US may have only a small percentage of its troops stationed in Europe but it maintains vast ground, naval, and air assets whose primary purpose is the defense of Europe. To move those forces into Europe the US maintains a logistics capability second to none. When the US Defense Department prepares its strategic plans and budgets it has to procure and maintain sufficient forces to quickly respond to an outbreak of hostilities on the European continent. To say that the US would not spend as much on defense if it did not have to defend Europe displays an ignorance of that reality. For example, how many tank and infantry divisions would the US need to have if it didn’t have to defend Europe? Germany and the UK certainly don’t have the forces to defend it. So it would be left to the US.
You sir, are the deluded one.
I appreciate you taking the time to write this but what utter nonsense.
Do you honestly believe European countries want to increase their defence spending so they can be a pawn in US geopolitics?
You write this like NATO is united in foreign policy when it clearly isn’t, look at the Iran deal, 28 members of NATO want to keep it yet because the US doesn’t it’s going down the pan, and you want Europe to spend more to help the US? Well they’re not going the right way about it are they.
And I thought NATO was a collective security alliance, you really think European NATO members want to get tied down in Africa and the Middle East again? Or even challenging China in the SCS. We might do yeah but most of Europe actually doesn’t.
The US acts alone geopolitically it always has, this is US vs China, and to a far lesser extent US vs Russia. The US will use allied support if it has it but ultimately it doesn’t need it at the moment.
The US will threaten its own allies if that allies actions threatens its own geopolitical ambitions (suez)
You mention the BRICS nations as an alliance that we need to worry about, since when did Brazil and India have the same geopolitical ambitions as China for crying out loud, the BRICS nations are purely economical.
A better example would of been the Shanghai Cooperation Organisation (SCO) which does have a military angle, but even then its collective security to try promote better relations between members as India and Pakistan are in it.
I’ve read lots of geopolitical analysis that broadly say the same thing, Europe and the US are on different trajectory’s, Europe has its own agenda through the EU that is trying to be independent from Washington.
I can’t believe you’re trying to drum up support for increased European defence spending because the US is losing its influence ?
These “analysis” articles are getting beyond proud now.
You just don’t get it, the US is not going to be number one forever, other than nuclear war there is nothing that can be done about it, China and India has over a billion people in their countries, look at the economies in 2050, China and India will be the top 2 and they will dwarf even the 3rd place USA.
You need to look at history, it’s only through two world wars, the most destructive in history and a chain of unlikely events that has led to the US being in this current position after 1991. Even during pax Britannica we were never dominant in every corner, there was still the Russian and Ottoman Empires, Emperial Japan, mainland Europe those alliances.
And that is what you and western journalists just can’t accept, sooner rather than later there will be countries and blocs that are as strong as the US, that they can’t coerce or dominate.
In 20/30/40 years the US will not be dominate in mainland Europe as the EU will be more united and be it’s own superpower, it has the money, the population and the Nuclear power the only thing it doesn’t have is the full political unity, next door to Russia, and in my eyes the EU and Russia will grow closer, especially after we leave the EU, they are tied economically and that will only increase.
China will be that powerful that it will be the main player in Asia, although the US will still hold some influence, Asian countries will be more and more economically intertwined with China and China’s military will be that large, and in its own backyard, it will be undisputed number one.
And you think a handful of 0.something increases in defence is going to stop this? Just how exactly?
This ain’t analysis, it’s a personal opinion based on a biased perspective of world events, and a desperate vision for the world order to stay the same as it is.
And proper analysis would examine the countries that are spending below the 2% target, look at their economies, their current immediate security threat, their domestic politics, who is in charge, what are the opposition saying, and even more importantly what are the public saying about defence spending.
But no, just bypass all that and bring up US geopolitical struggles in Africa, yeah this is going to be a game change mate ?
Miss out all that proper analysis and talk about increasing defence spending like it’s as easy as shelling peas.
And you also conveniently left out that NATO members contribute to a collective budget for the alliance. There’s a civilian budget of about $286 million for 2018, used mainly to fund the NATO headquarters in Belgium and its administration.
And there’s a military budget of $1.54 billion for 2018, which is used to fund some operations and the NATO strategic command center, as well as training and research.
There is also a joint budget for the NATO Security Investment Programme, which covers major construction and command and control system investments. The budget for that program is capped at $817 million for 2018.
Member countries contribute to these NATO budgets in accordance with an agreed cost-sharing formula based on gross national income. The US pays 22.1% of these budgets, while Germany pays 14.8%. All members are up to date on these contributions.
Of course those facts don’t fit the narrative so they?
After Trump’s recent visit to NATO HQ I got the impression that many delinquent members nodded and smiled a lot in his direction, but had no intention of rerouting vital civilian budgets to defence? Now, that could be a bit skeptical on my part, however, once Trump exists his presidency and walks back to Tumpyland, won’t they all fall back on past habits, and assume the US will always come to Europe’s aide if the circumstances become too grave?
I think most actually do want to increase defence spending, but gradually at their own pace.
Here you assume economic and population trends are static (they aren’t). China has debt levels both corporate and governmental in excess of US levels and rising. Their economy has been slowing and to top it all off China has to spend almost as much money on interior security as it does the PLA.
The PLAN has built a lot of new ships, but have you ever been on a ship made in China? Some of them are barely held together and the welds look like a death trap if you kicked them to hard. Beyond that when you see the ships the PLAN has built there seems to have been almost no thought put into refits, repairs, and overhauls. Due to multiple different types of each class often with different equipment (logistical nightmare) and insufficient yard capacity being built to support the Fleet they plan on building. China also has demonstrated a positive talent for pissing off every neighbor it has from Vietnam and Thailand to Japan and Singapore. Number 1 power in the coming decades? I think not.
EU more united? Let’s see the EU can’t even handle men in row boats. Boats that appeared because it fell to individual countries to secure the border instead of Brussels. Who instead of acknowledging they were wrong instead tried to force the migrants on to the very countries that had just built fences and sent their armies to patrol the border. If there is an EU in 2040 I would be shocked. Considering the sentiments of the Visegrad group.
Russian hasn’t “moved closer” to Europe for 400 years. A mere 30 years is not going to change that.
As for India surpassing the United States? I rather doubt it and so apparently do the Indians. As people from India are currently the largest per year arrival group of immigrants (also some of the most productive). Is India making progress? Yes, but much slower than necessary to match the per capita and purchasing power parity of the American worker by 2050 (ie what can be taxed).
Elliot China has already passed the US in PPP and is pulling away, PPP is arguably a better indication of how strong an economy is. Population trend is redundant in China’s and India’s case as the population is already there, over a billion in each.
China overtook the US in manufacturing output a decade ago and is still pulling away, exports are a third larger and it’s the worlds largest trading nation.
Chinese debt is 240% of GDP where as American is over 300%.
Quite a lot of economists argue that the way in which China operates with a politics first approach to it’s economy, makes a financial crisis less likely to happen, in fact they believe it wont. Not to mention that debt in economies like the US and China are not a real thing to worry about.
People say a slowing economy, like 7% down to 6%, Chinese economic growth was at its fastest in two years at the start of the year. It shows no real sign of slowing at the levels needed for the US to regain real top spot in PPP.
Chinese urbanization is about at the same level as the US was in 1940, that is how much scope it has to get people into the cities earning more money.
Anybody that says China will not overtake the US (It already has in PPP) in overall economical terms is deluded.
Regarding the Chinese navy it has never had a blue water navy, so i don’t think anyone is expecting them to build ships as good as the west, far from it, but it won’t take long, don’t think just because they are Chinese they cant be as technologically advanced as the west, Chinese people have invented some of the greatest things in history, with money and practice it wont take long for them to build great ships. Even the US builds duds sometimes.
I think it’s quite clear at current trajectory China will be the number 1 in Asia in the coming decades, I think it already is in the SCS, the US just sat back and watched when they militarized the sea, if the US had undisputed power in the region it would of went in then and stopped it. I actually think it should of and i would of wanted the UK to help, I’m a believer in the UN and international law and that is quite clear on the SCS. You can be sure the Royal Navy would of been in without a second thought when we were number 1 in the region.
No Elliot the men in row boats appeared because of the US thirst for regime change, like the nutcase witch killory said “we came, we saw he died” It was the US led bombing of Libya that started the refugee crisis on Europe’s doorstep. The old classic bomb first think later approach to geopolitics that the author of this article is asking European countries to contribute to.
I’m guessing you have heard about the Visegrad group from a US news networke who have given you the wrong impression, the Visegrad groups aims are closer political union within the EU.
I don’t agree with the EU’s current four freedoms and it’s economical mode, it is creating anti EU sentiment, but in regards to diplomatic relations and unity, Europe is at it’s strongest in history, never before have the big four (Britain, France, Germany and Italy) been this close. And the rest of the EU countries are close, the EU would reform before failure. If you think a refugee crisis will break European unity you’re misguided.
400 years? Russia moved closer to Europe after 1991, we were allies against Napoleon, first world war, and that’s just Britain. Russia has had close allies in Europe for well over 400 years. Imo after Britain leaves the EU, the EU will eventually grow closer economically to Russia, and after that who knows.
My original comment was not meant to be an anti-American rant, it was an anti-sick of hearing US politicians and journalists in this country crying like a fat kid at the counter complaining for more sweets when it comes to asking for European countries to spend more on defence. Without even considering their domestic situation, I find it disrespectful.
Also in your examples of Russia having “moved” closer. All of those prove my point at no point has Russia and Western Europe entered into a sustained amicable relationship. Napoleon’s Army that invaded Russia included troops from half of Europe not just France. So Russia was by then acting in self-preservation.
In WWI the Western allies used the Russian Imperial Army as a bullet stop. Then took credit for the victories, despite if it hadn’t been for actions such as the Brusilov Offensive. The Somme would have gone from strategic and tactical mistake to unmitigated disaster, as the Reichswher had to move the forces meant for the counter attack on the Somme to the East. In thanks the Western allies left them to Civil War and Comm
In 1991 they received economic collapse, terrorism, and armed conflict on the periphery. While the EU and NATO both moved in and made themselves at home in what Russia considers their buffer zone. Britain during this time period notably started to publicly give asylum to high profile fugitives wanted for crimes against the State.
So no the trend historically is not for Russia to willingly become closer to the west and even when it does both sides get burned.
But western Europe itself has only been united since the end of the war, no two major powers had sustained relationships before, but Russia certainly had times of closeness with a number of states before the 20th century.
We became allies with Russia before WW1 started, the triple entente, they were allies with Germany before that for a while, Russia was another European power with a monarchy, it has had more or less the same up and down European relationship as Britain, France and Germany/Prussia had, one decade it was friends with a country, the next it was at war.
My point is the idea that Russia has been isolationist for 400 years is not accurate, it has not had a close relationship with Europe for 400 years because nobody has. Only since the Russian revolution has Russia been seen as on the outside. Well that revolution ended in 1991 so perhaps it’s time to bring them back in.
The disrespect is mutual. As a septic tank, i can tell you, we have some domestic problems that I believe we would rather take care of then meddle in the European/Middle Eastern theatre. I am not advocating a full withdraw, but I can certainly see a changing sentiment in the heartland of America towards further integration into NATO affairs.
Please, i apololigize for the US press. I returned from a tour of London, Cech Rep, Austria and Germany, and must confess, the yank news readers are a horrible bunch. I also must confess, I feel the news the Europeans are getting is a bit “thin” on substance and highly skewed with a left bias. That is just a truthful observation.
In short, the Trump Doctrine of utilizing our economic leverage like never before, to achieve positive economic impact domestically is a new direction. We are the world’s consumer. And we advocate ZERO tariffs, fairer and freer trade, (again something I felt while on my summer European tour, no one knew that EU started the tariff game, and EU tariffs were higher on US goods then vis a versa). Again, another story.
US population is just fine and I would take it over all countries but India and Mexico. US capital structure is fine, as is it’s legal and political structure. Stack all G8’s up against each other, and we are still the cleanest dirtiest shirt in the laundry basket. This will slowly change.
Russia is a paper tiger IMHO fabricated by the same silly yank news readers and Washington politicos. Trump actually wants better relations with Russia. (Try to understand that sentence void of the Leftist anti-Trump/ Russia Collusion narrative you and everyone have been hearing from the Leftist media. Honestly, CNN is bad.) For Americans, we are seeing more and more of the collision is largely leftist generated, and Hillary’s and the DNC’s hands are on it.
A must watch for everyone who thinks that America is going to die in a fiery crash.
it is one hour of one mans opinion, worth watching. Sincerely. Worth watching. I dont agree with everything but much here is awesome truth bombs
https://www.realclearpolitics.com/video/2018/07/26/accidental_superpowe…
Here is a snippet: Compared to the rest of the world, we are the cleanest dirtiest shirt in the laundry basket…
“In 2007, total Chinese lending surpassed total American lending. It then tripled in the next 18 months because of the financial crisis… Now we have this thing called shadow financing… You guys all remember the Obama stimulus package? $800 billion, 3% of GDP over two years. There was a lot of concern among economists that the U.S. couldn’t metabolize that much money that quickly without a lot of fraud, a reasonable concern. [China does] an Obama stimulus package every 17 days now. Will you get growth that way? Sure. But it is not healthy or sustainable.”
and this truth nugget….
“So Angela Merkel was the third world leader to come and seek a new bilateral relationship with the incoming administration. She told him that if he does what he plans to do, it is not just the end of NATO and the European Union, but the end of Germany itself. And Trump’s response: Yep.
Merkel didn’t understand the new bilateral nature of American policy. The new transactional nature. She didn’t bring anything to the table, she just came to ask for the U.S. to continue doing what it had been. And so on her way out the door, Donald Trump gave her a parting gift, a bill for service rendered for defending Germany since 1946. You can imagine how well that went over in Berlin. For all intents and purposes the American-German, American-EU, American-NATO relationship is already over. ”
and this one
“U.S. does not have to play a role in any of these Middle east conflicts if it doesn’t want to. In fact, thanks to President Trump, the U.S. might be the beneficiary of a second century as the “last man standing,” watching the rest of the world tear itself down repeatedly. Remarkably Zeihan predicts that due to rapidly shifting world events and U.S. demographics, and our energy independence due to shale and alternatives, President Trump is likely to be the “most internationalist” and “least populist” American president of the rest of our lifetimes.
it is one hour of one mans opinion, worth watching. Sincerely. Worth watching. I dont agree with everything but much here is awesome truth bombs
https://www.realclearpolitics.com/video/2018/07/26/accidental_superpowe…
Not to mention the incredible disappearing workforce they have due to aging and social engineering…
https://www.forbes.com/sites/kenrapoza/2017/02/21/chinas-aging-population-becoming-more-of-a-problem/
Cheers!
Hi Helions
Don’t think i’m having a bash at the US as that was not my intention in my comments, i’m very much pro US as a country and certainly people as you probably know through our previous chats, I just don’t always agree with US foreign policy (mainly the middle east). My comments on China was more of a realization that as the world changes things will not be the same as they are now, in a few regions around the world, and i think it’s a futile to try preserve the current world order when it’s bound to change, in history it always has. And i actually agree with US policy on China, and would expect and support our total support to the US to respond to any Chinese aggression.
It’s nearly 1am here i’m off to bed but will reply to your other comments tomorrow.
Absolutely not Sole, good healthy discussion and differing points of view is what sorts things out and then brings them together. We will need much more of it at the national levels of our respective countries and allies in the future.
It will only get harder from here IMO.
Cheers!
Sole
The Chinese debt ratio is considered higher and more worrisome by the IMF, OECD, and the People’s Bank of China for several reasons:
1. China is still a middle income country with a GDP adjusted purchasing power parity of 15,400 less than a quarter of the US.
2. It was racked up very quick and China is continuing to rack it up geometrically.
3. In China a large part of the debt was taken out by corporations. However that is worse than it appears at a glance. As almost every company in China is in someway affiliated with the government or Communist Party. So any default by a company hits the government also. Forcing it to either take a loss or have costly bailouts. Using a already deflated currency (short term solution).
It depends on what source you use, they all use different methods to calculate a countries debt, Gross US debt was 400% in 2009, it is still over 300%, Chines total debt is 350% currently, again different organisations give different numbers.
I’m not an economist but i read a lot, and have seen western economists predict China’s ruin for 25 years, and it hasn’t come.
Here is an article from the financial times which explains it a lot better than I ever could
Are rising debt-to-gross domestic product ratios around the world a sign that another financial crisis is looming? At a recent investment conference, I had a heated debate with an economist who claimed that rising indebtedness across the globe was a sure sign of renewed economic sickness and deterioration. “The Minsky moment will return,” he declared, pounding the table. He singled out China as the place where the next financial collapse would occur. Credit expansion there, he said, had grown “too much, too fast”.
For decades, the debt-to-GDP ratio has been widely used as the key gauge of a nation’s financial vulnerability. Nevertheless, this measure has proved to be misleading. In the mid-1990s, when Japan’s gross ratio approached 120 per cent, many concluded that the country was heading for fiscal ruin, which would inevitably collapse the bond market and the yen, and cause hyperinflation. What has happened since then is that the total ratio has risen to 250 per cent today, while Japanese government bond yields have fallen to zero. Japan has suffered decades of price deflation.
Looking around the world, the levels of interest rates for different countries are negatively correlated with levels of total indebtedness. Countries that have borrowed aggressively — such as Japan, China and Singapore — have very low or zero interest rates. On the other hand, countries that have barely borrowed, including Brazil, Russia and Indonesia, usually pay very high interest rates. This negative correlation is highly significant, disproving the widely held notion that higher debt levels lead to higher risk premia at the macro level.
How is this negative correlation explained? Interest rates are the price of domestic savings, and countries with more abundant savings almost always have lower interest rates. Moreover, every economy needs to transform its domestic savings into investment, usually through the banking system. It is inevitable, therefore, that countries with higher savings rates have lower interest rates, but higher levels of credit creation (or debt-to-GDP ratios) — because banks need to extend more credit to move larger pools of savings into investment. This means there is nothing wrong with high-saver nations having high ratios.
The fundamental problem with this ratio is that it only provides a narrow snapshot of an economy’s debt picture. Debt is a stock concept, while GDP is a flow. The ratio tells you more about how much of an economy’s accumulated savings have been allocated via the debt channel. It does not tell us anything about a country’s net asset position. Nor does it provide any information on debt-servicing costs or the mix of local versus foreign currency-denominated debt. As such, the debt-to-GDP ratio gives us almost no information on a nation’s ability to sustain its debt.
In recent years, the rapid escalation of China’s credit-to-GDP ratio has been watched keenly by the investment community. Many predict that a debt crisis in the country would be the next big event that would bring down the world economy and global financial markets. I disagree. China’s domestic saving rate is 48 per cent, which amounts to almost $6tn of new savings each year. This vast pool of savings primarily relies on state-owned banks for allocation. It is therefore inevitable that the country has a high credit-to-GDP ratio.
Furthermore, so-called credit risk in China is, in fact, sovereign risk. The Chinese government often relies on bank credit to finance government stimulus programmes. In 2009, Beijing launched a fiscal package worth more than $600bn to combat the effects of the global recession that followed the financial crisis. Subsequently, Chinese bank credit growth climbed steeply, lifting the credit-to-GDP ratio to new highs. In essence, the Chinese government was using credit expansion to finance fiscal stimulus. This was a credit-based equivalent of the Troubled Asset Relief Program in the US. There, fiscal stimulus programmes are financed by increasing public sector debt. In China, they are often funded by depositors.
China has a chronic current account surplus and has been a net creditor to the rest of the world for decades. Beijing’s outstanding public sector debt, valued at about $4tn, is dwarfed by the vast assets controlled by the various levels of governments. Therefore, China’s sovereign risk is extremely low. Importantly, the balance sheets of the Chinese state-owned banks, the government and the People’s Bank of China are all interconnected. Under these circumstances, a debt crisis in China is almost impossible.
The writer is founding partner and chief global strategist at Alpine Macro
Hi SoleSurvivor, in the interests of healthy discussion, I will try my best to respond to as many of your points as I can but as you made quite a lot of separate ones, forgive me if I miss some out.
“Do you honestly believe European countries want to increase their defence spending so they can be a pawn in US geopolitics?”
No, it is my belief that some European countries don’t want to increase their defence spending at all, at least not enough to be significant. Their consistent resistance to administration after administration when they ask European countries to increase budgets implies this. However, if they were to I would be sceptical that they would do so to be a pawn in geopolitics and not instead in the interests of common self-defence (mainly due to, as both you and I correctly identified, the United States will probably not be the sole military and economic superpower in the world for very long.)
“You write this like NATO is united in foreign policy when it clearly isn’t, look at the Iran deal, ”
Again, I don’t think they are either. Common self-defence is the only uniting universal Foreign Policy I think the NATO29 has. Although with this said, NATO has in the past been keen in some instances to try and maintain their balance of geopolitical power, although there are more cases where this hasn’t happened (i.e. Vietnam)
“And I thought NATO was a collective security alliance, you really think European NATO members want to get tied down in Africa and the Middle East again? Or even challenging China in the SCS. We might do yeah but most of Europe actually doesn’t.”
In my article I mainly highlight the examples of China in the SCS and Russia in Syria as a means to demonstrate that NATO’s adversaries are challenging the geopolitical supremacy that the Western alliances have enjoyed for a few decades now. Maybe Ukraine was a better example to use to demonstrate the fact that the boldness of Russia/China (Russia in this case more specifically) should worry NATO members and maybe spur greater collective spending from European members as it was happening closer to home. Sure, quite a good few NATO members might not be interested in intervening in the Middle East, Africa or the SCS, but surely they would want to be a strong collective security alliance if Russia and China become so bold as to make moves and get aggressive closer to home as was the case with the Crimea?
“The US acts alone geopolitically it always has, this is US vs China, and to a far lesser extent US vs Russia. The US will use allied support if it has it but ultimately it doesn’t need it at the moment.”
Completely agree with the US v China part, at the minute, but this may change – and NATO needs to be prepared for that. Completely disagree with the US v Russia part. I think Europe has a very good reason to be an adversary of Russia, independently of the United States – prime example annexation of Crimea. Europe and Russia have been uneasy neighbours with Russia for centuries, before the United States was an economic or militaristic superpower – even without the United States in NATO I think Europe might’ve been a little rustled when they annexed a region less than a couple of thousand miles away from the NATO border.
“You mention the BRICS nations as an alliance that we need to worry about, since when did Brazil and India have the same geopolitical ambitions as China for crying out loud, the BRICS nations are purely economical.”
Again, forgive me but I think you may have taken what I have written out of context a little here, I mention BRICS as a bloc that, collectively, might be able to challenge the supremacy of NATO at some point in the future, I explicitly say that BRICS, at the minute, is a wholly economic partnership. But so was the EU once if you might recall, and there are plans for a common EU Foreign Policy to be entrenched – how I use the example of BRICS and ASEAN is that, to have significant geopolitical weight as a partnership, the United States or a United States-esque superpower (e.g. the USSR in its hayday) isn’t necessary and that these might grow to challenge NATO in the future.
“I can’t believe you’re trying to drum up support for increased European defence spending because the US is losing its influence ?”
Well, yes. Not necessarily because I want the United States to have massive influence in countries like Africa and the Middle East per se, more the fact that the US might not be able to provide the significant Air, Naval and geopolitical defences that Europe has been relying on ever since the Second World War ended and all throughout the Cold War (there are multiple examples of the US being the principle defence in Europe for example Short-Range Nuclear forces in the 50s through to the 90s) and to a great extent I believe that protection continues to this day.
“You just don’t get it, the US is not going to be number one forever, other than nuclear war there is nothing that can be done about it, China and India has over a billion people in their countries, look at the economies in 2050, China and India will be the top 2 and they will dwarf even the 3rd place USA.”
Completely agree. The whole underlying premise of my article is that the US isn’t going to be dominant forever, and as a common-defence alliance this means that NATO may not be strong enough as a collective to defend itself from adversaries, as such it is my belief that European nations should increase defence spending as to compensate for the US’ impending decrease in relative influence.
“And that is what you and western journalists just can’t accept, sooner rather than later there will be countries and blocs that are as strong as the US, that they can’t coerce or dominate.”
Uhm, again, sorry to say but “The US isn’t going to be dominant forever” may as well have been the title of the article. My point is that NATO has to remain strong enough to promote peace through strength by being stronger as a collective defence alliance, as opposed to the United States being the sole superpower – which it won’t be for very long.
“In 20/30/40 years the US will not be dominate in mainland Europe as the EU will be more united and be it’s own superpower, it has the money, the population and the Nuclear power the only thing it doesn’t have is the full political unity, ”
Agree that the US may not be as dominant in mainland Europe, but I’ll be extremely surprised if the EU ever makes Europe into a superstate. The political unity you highlight as the thing the EU is lacking to be its own superpower isn’t an easy thing to achieve – so much so that I would wager it may never happen.
“And you think a handful of 0.something increases in defence is going to stop this? Just how exactly?”
I don’t expect it to stop the rise of China. I’m saying that NATO members will need to increase their defence spending to remain a viable military alliance capable of defending itself against future economic and military superpowers such as Russia and China.
“This ain’t analysis, it’s a personal opinion based on a biased perspective of world events, and a desperate vision for the world order to stay the same as it is.”
Well, I mean as a result of NATO, the United States and the current “world order” Europe has avoided large-scale conflict for over 70 years – one of the longest periods of peace in Europe for centuries – because of peace through strength and Europe having enough strength as a block to defend itself, the chance of war has significantly been lessened. So yes, a strong Europe unified in its goal of defending each other as opposed to attacking each other, I’m happy with that thank you very much.
“And proper analysis would examine the countries that are spending below the 2% target, look at their economies, their current immediate security threat, their domestic politics, who is in charge, what are the opposition saying, and even more importantly what are the public saying about defence spending.”
Okay, I may have missed that in the article, but let’s have a quick gander. Germany is one of the big offenders for spending below the 2% target. Shall we have a look at its economy? Oh yes, that’s right, it’s the biggest in Europe and the second biggest in the alliance, as well as being the 4th largest in the world. While ‘the German problem’ once denoted a fear of Germany increasing its military power for fear of it becoming the Fourth Reich with imperial ambitions once more, nowadays I find that, as a cultural explanation for spending little on defence not very convincing. I think the German military wants the civilian government to spend more on defence (there is an article somewhere of a German general saying just that I think on this site) – as for the political class in Germany, Merkel has expressed she will spend more on defence, but this may just be lip service, like what we’ve seen in the past.
Even struggling EU countries can spend 2% on Defence. Greece has one of the most fledgling economies on the continent, yet they manage to spend the 2%? I struggle to see why Germany and many other more developed and industrialised economies fail to spend their fair share on defence. As for immediate threats, most European countries indeed have few at the minute, save for perhaps terrorism. However, dealing with immediate threats isn’t NATO’s purpose. The purpose of NATO is to be strong enough as a bloc to be prepared and defend against all potential threats against members of the bloc. As such, they should spend their fair share on defence at all times – at least enough so that collectively the bloc is strong enough to face threats to common security – as is the purpose of the alliance.
“Of course those facts don’t fit the narrative do they?”
Well, I mean those budgets combined add up to around $2.3bn – a drop in the bucket of the total spending on defence needed. Great, Germany contributes fairly to $2.3bn’s worth of spending – but what about the rest? In my opinion the fact that Germany may contribute fairly to a small amount of NATO spending does not detract from the fact that it vastly underspends on defence relative to what it really should to truly contribute fairly to Europe’s collective defence.
Can I say all three of you make some very good and spot on points. I enjoyed reading all three posts. Can I add that China – while inevitably rising to a full peer of the U.S. has many of its own challenges – almost all internal – that must be addressed if the country’s “Sino Manifest Destiny” is to realized.
The Chinese leadership is less concerned by the outside world than it is afraid of its citizens. My father served there in the USMC in 1948-49 and he often told me that the Chinese were the world’s greatest merchants and that China would rise to become a superpower again – this was in the early 70’s after President Nixon went there.
He also stated that the CCP came to power by the gun and in his opinion would leave power the same way because the Chinese people were too smart to stand the restrictions of communism / authoritarianism for long once they had a taste of making money and a better life.
Much of what he predicted has come to pass. I wonder if the last will bear out as well… If it does, then this will be the time of greatest danger of war because you know the old saying…
https://www.theguardian.com/world/2018/aug/04/cracks-appear-in-invincible-xi-jinpings-authority-over-china
Cheers!
I read that article the other day and was intrigued by it, it’s interesting to think of China’s future, and does the population have the strength and unity to start an uprising, knowing what the response would be.
I think only through severe economic hardship or foreign intervention can dictators fall, I just cannot see it in China without those factors. And so will those factors come into play, i just can’t see it in the foreseeable future.
That region has an unpredictable future and the west needs to be ready when the s**t hits the fan.
“In 2007, total Chinese lending surpassed total American lending. It then tripled in the next 18 months because of the financial crisis… Now we have this thing called shadow financing… You guys all remember the Obama stimulus package? $800 billion, 3% of GDP over two years. There was a lot of concern among economists that the U.S. couldn’t metabolize that much money that quickly without a lot of fraud, a reasonable concern. [China does] an Obama stimulus package every 17 days now. Will you get growth that way? Sure. But it is not healthy or sustainable.”
And to the other points mentioned in this debate…..
“U.S. does not have to play a role in any of these Middle East conflicts if it doesn’t want to. In fact, thanks to President Trump, the U.S. might be the beneficiary of a second century as the “last man standing,” watching the rest of the world tear itself down repeatedly. Remarkably Zeihan predicts that due to rapidly shifting world events and U.S. demographics, and our energy independence due to shale and alternatives, President Trump is likely to be the “most internationalist” and “least populist” American president of the rest of our lifetimes…”
https://www.realclearpolitics.com/video/2018/07/26/accidental_superpowe…
Evening Joe, thanks for replying, and well done you are now officially part of the 1% of authors who have the decency to reply and respond to a reply/criticism of their article.
And it’s a fair reply, you have cleared up some of my initial criticism and i understand your narrative a bit clearer although I do have issues with some part of it still.
“In my article I mainly highlight the examples of China in the SCS and Russia in Syria as a means to demonstrate that NATO’s adversaries are challenging the geopolitical supremacy that the Western alliances have enjoyed for a few decades now”
I don’t think that China is NATO’s adversary in the SCS, you will never see united NATO action in the SCS in an aggressive counter China way, Britain and France yes. Not only that European NATO members need to increase their defence budgets to fix some serious issues in their militaries that do not include sending ships to the SCS, i’m struggling to think the generals of Albania, Luxemberg, Slovenia and Latvia are really thinking “when we increase our defence spending at least we can help in the SCS to counter China” Around 10 countries in NATO barely have a Navy of note, some can muster a patrol boat. Most increase in defence for about half of NATO members would be concentrating on land power, that is why you bringing up China as a reason for NATO to spend more is misguided.
China is challenging US geopolitical supremacy in the SCS not NATO’s.
“Maybe Ukraine was a better example to use to demonstrate the fact that the boldness of Russia/China (Russia in this case more specifically)”
It would not be a better example to me, The reality in Ukraine is that after two decades of eastward Nato expansion, this crisis was triggered by the west’s attempt to pull Ukraine decisively into its orbit and defence structure, via an explicitly anti-Moscow EU association agreement. Its rejection led to the Maidan protests and the installation of an anti-Russian administration – rejected by half the country – that went on to sign the EU and International Monetary Fund agreements regardless.
Obama admitted in a CNN interview that the US had “brokered a deal” to transition power in Ukraine, leaked papers reveal the US had spent $5bn in the Ukraine pushing it towards to the west.
Ukraine was a US sponsored and orchestrated coup, it’s widely known now, just google 2014 coup in Ukraine, tons and tons of evidence, even the Guardian has an article on it.
“so bold as to make moves and get aggressive closer to home as was the case with the Crimea?”
Crimea voted 96% to join Russia, 70% are ethnic Russians, there was not a single shot or protest in resistance to this “aggressive annexation.
Putin’s absorption of Crimea and support for the rebellion in eastern Ukraine is clearly defensive, it’s clear we are at different ends of the Russian/Ukraine narrative, yours is from the BBC and mine is from what i have read online from Ukrainians, videos of thousands of people in support of Russia in Ukraine, the stuff you don’t see on the BBC. Wikileaks files that show definitive proof of US involvement in that coup, even if you decide not to look for it, John Mcain was on stage next to a leader of a far right political group saying “America is with you” then him and his colleagues handpicked a pro-west leader without an election, that is all the proof you need.
“Europe and Russia have been uneasy neighbours with Russia for centuries”
So were we and France, except actual blood was spilled and invasions happened, things change, instead of promoting an arms race, why not build bridges, do you not think it would better for the people of Europe if our leaders reached out to Putin, why not have a massive conference and find out what his beef is? lets talk, how do we bring peace in Ukraine? lets sign some treaties restricting the current militarized borders, lets cut back on the war games, anything is better than a return to reds under the bed.
The only person who wants to talk, and it’s no coincidence that he isn’t a career politician, is Donald Trump, and look at what’s happening to him because of it, he has 95% of the liberal elite media and the US deep state in a perma-rage that he has the audacity to want to speak and build bridges with Putin, and when he said it during the election he got cheers from the crowd and was vilified by the media.
“US might not be able to provide the significant Air, Naval and geopolitical defences that Europe has been relying on ever since the Second World War ended and all throughout the Cold War”
Again we differ, I don’t think there is any threat to Europe at the moment, in fact US troops are probably needed elsewhere, they could start by sending them into Libya and clearing up the mess they started from the air, Libya, a country that medical and university was free, had no external debt, had the worlds largest irrigation project, everybody had food, gender equality and a HDI better than two thirds of the countries on the list. That current failed state run by warlords created by NATO’s geopolitics.
“The political unity you highlight as the thing the EU is lacking to be its own superpower isn’t an easy thing to achieve – so much so that I would wager it may never happen.”
The political unity may never happen but the EU is heading for it’s own collective security and it is already totally unified in economic terms, and with that fact a common geopolitical approach, and a strong collective defence is vital for continued economic growth, therefore it’s plain for all to see that the EU sees itself as sooner rather than later, being reliant on itself for defence as that brings independence from external power and influence, they will want to make decisions based on their own interests, just as they are doing right now with the Iran deal.
Once again I come back to their being no immediate threat to Europe (which you even admit), you cannot find one leaked e mail or stolen papers, any general or politicians comments that point in any way to some dastardly Russian (who has a GDP smaller than Italy) plan to steam roll through the whole of Europe, and then what would they do, stay there and create a new soviet union? the sheer idea is preposterous, even if it’s one for the future.
“Well, I mean as a result of NATO, the United States and the current “world order” Europe has avoided large-scale conflict for over 70 years – one of the longest periods of peace in Europe for centuries – because of peace through strength and Europe having enough strength as a block to defend itself, the chance of war has significantly been lessened. So yes, a strong Europe unified in its goal of defending each other as opposed to attacking each other, I’m happy with that thank you very much.”
Avoided large scale conflict yes, but there has always been periods of peace in Europe, ok not this long but it was never under the shadow of nuclear annihilation, we came to the brink of that a couple of times being right in the middle of the cold war. Yes we have come through and Europe is united as ever, and I agree NATO has helped that no doubt, and your comment is absolutely right, except in this article you have not just used the defence of Europe, you brought Africa and Asia into it and that was my main issue with it.
I think NATO should be strong at what it was created for, European defence, not intervention in different continents.
“Okay, I may have missed that in the article, but let’s have a quick gander. Germany is one of the big offenders for spending below the 2% target. Shall we have a look at its economy?”
I will tell you another big offender, Albania, $1.2 trillion in debt, 120th economy in the world by PPP, ravaged by organised crime and corruption, it’s a developing country.
“Germany contributes fairly to $2.3bn’s worth of spending – but what about the rest?”
Rest of what? those are the NATO budgets, Germany is spending on defence what it sees fit, it should be the choice and decision of the sovereign state to decide what it spends tax payers money on, I have advocated we spend more on defence, i have been in countless debates on this very site and not once has “because we need to improve NATO” has come up, it’s because that’s what we need as a country with geopolitical ambitions ourselves should spend, so why can’t other countries own needs and ambitions be respected?
Do European NATO members need to increase their defence to make themselves stronger as a bloc, of course they do, but even as you admit yourself the immediate threat is terrorism, you’re asking countries with no ambition to do anything on the world stage to cut budgets like health, education and welfare to improve it’s military on the off chance that something might happen in the future.
I actually want Chinese aggression in the SCS countered, but that would come from us helping the US, maybe France. That is not NATO as a whole, we have our own thing going on, I would of better reacted to an article on British and french increase of military expenditure, it has a valid reason, it’s just about politically viable and it makes more sense.
You could of just mentioned European defensive capabilities and where they need to increase, but you didn’t you threw a load of reasons that only affect certain countries trying to drum up support.
And even then as I’ve said, jumping up half or a full percent of a budget is not an easy thing to do for any country, i think yourself and US politicians are not showing any respect to domestic politics in your request for increased defence.
Again thanks for replying.
Forgive me for having to cherry pick some of your arguments to respond to, I’m currently working on three different articles for three different websites so I’m a bit pressed for time!
Also, as a disclaimer, forgive me for misguided or a lack of sophisticated understanding. For a bit of context, I’m not even an undergraduate yet – I’m currently 18 and awaiting my A Level Results and I’m constantly learning.
While I agree that NATO isn’t unified in locking tusks with China in the SCS, and the opposition to China comes primarily from the US with the help of some other countries, I think it does show that show that NATO isn’t the most dominant military bloc in the world anymore and, as such, other NATO members need to spend more on defence as to preemptively make adequate preparations for defensive purposes. Also, in what *might* link NATO to SCS – here’s Jens Stoltenberg making a statement on China and the SCS: https://www.nato.int/cps/en/natohq/opinions_148029.htm?selectedLocale=en
Yes, China is challenging the United States’ supremacy in the SCS, but I don’t think indirectly it affects the United States exclusively. The secondary effect of the US not being as strong as it has been means that, as a collective, NATO fails to be as strong as it has been. This, I think is a problem especially when conventional warfare is less and less likely to happen and instead will take the form of cyber warfare etc.
As for Crimea, I have little doubt that the pro-western Ukrainian govt was *probably* installed by the West. As for the Crimean annexation, I agree that it was in effect a bloodless coup. However, the fact Russia has used the absorption of Crimea to solidify and move forward Naval forces (i.e. Sevastopol Naval base) – as well as thousands of troops moved into the region – as proof that Putin has used the absorption of Crimea as an opportunity to move conventional forces less than 2000 miles from Europe’s borders – hence why I used it as an example of why NATO should probably be a bit more worried.
As for your faith in the referendum result, while it is likely a majority of ethnic Russians may well have wanted to be part of Russia versus Ukraine, I can’t accept the referendum result as evidence considering OSCE observers were turned away from electoral events with gunfire: https://www.reuters.com/article/us-osce-shots/warning-shots-fired-as-osce-mission-turned-away-from-crimea-idUSBREA270HJ20140308
“instead of promoting an arms race, why not build bridges, do you not think it would better for the people of Europe if our leaders reached out to Putin, why not have a massive conference and find out what his beef is?”
I’m all for friendlier relations with Putin, if he is to be friendly with us. However, government sponsored cyber attacks on our Health Service, energy infrastructure, private companies and financial infrastructure, combined with the alleged Novichok episode (in my opinion, Russia *probably* did it, but obviously I haven’t seen the evidence the UK has myself) as well as interference with elections of Western nations suggests that Putin may well not fancy friendlier relations himself.
I’m fully supportive of a dialogue with Putin. I was very much supportive of Boris Johnson, when Foreign Secretary, sitting down with Sergei Lavrov as well as the Helsinki conference. However, there has to be some give *and* take. Putin has to offer something. And, correct me if I’m wrong, I’ve seen Putin offer nothing but hostility. The narrative of Putin being bullied by the West and him just taking the bullying totally undeservedly is somewhat misguided.
“I don’t think there is any threat to Europe at the moment”
Correct, but the big three words in that point is ‘at the moment’, NATO isn’t designed to respond to threats as and when they come. The point of NATO is a constant preparedness to match any adversary. As such, it needs to maintain, as a collective, a total defence umbrella strong enough to defend against any potential adversary. Do I think that Russia will suddenly steamroll through Europe? Probably not, but the point of NATO is that its meant to be ready in case something like that happens at all times. The goal of the bloc should be to stay, collectively, at the same or similar strength as other blocs or superpowers, current or potential.
“and it is already totally unified in economic terms,”
I wouldn’t agree, there is widespread discontent across the Mediterranean with the Eurozone and the EU in General. I recently visited Rhodes in Greece and the EU flag had been torn down at nearly every civic building I saw, even at the airport. This, from what I can tell, is a picture played out across Greece, Italy, Spain, Hungary, Romania etc. The only thing unifying them is their bondage to the European Central Bank through debt and bailout commitments etc. I think PESCO has a long way to go before it becomes a unifying defence force.
“I will tell you another big offender, Albania, $1.2 trillion in debt, 120th economy in the world by PPP, ravaged by organised crime and corruption, it’s a developing country.”
Granted, but Albania isn’t really the focus of criticism of EU nations not spending enough. Who American leaders have criticised specifically are really countries that should be doing better, those that have a big disparity between their economic clout and their military spending, such as Germany. Although this isn’t explicitly clear in the article (something to improve upon) it is my belief that richer countries that fail to spend the 2% are the biggest offenders that warrant justified criticism within NATO. Countries in the predicament you mention such as Albania should be helped by organisations such as Europol and other EU nations, and *then* be expected to pay their fair share. I’m very keen on ‘fair’ shares, obviously such a concept is very subjective – the viewpoint I choose to take is that where there is an disparity between how strong economically a nation is and how strong its military it is that disparity needs to be addressed to call it a ‘fair’ share – hence why I use the example of Germany as such because the fact a nation with such a large economy but benefits from a defence which it itself offers very little towards is downright wrong, in my opinion.
“Germany is spending on defence what it sees fit, it should be the choice and decision of the sovereign state to decide what it spends tax payers money on”
While this is correct in essence, Germany is enjoying the collective security that NATO provides, and is punching below its weight insofar as what it should be contributing to that collective defence agreement. I think I saw somewhere NATO compared to an analogy of a barbecue where several friends are invited. It is not imperative to the survival of the barbecue that the visitors chip nothing in, for the host holds the responsibility to provide the basics or the lion share of the feast. However, it would certainly be good manners for the rest of the attendees to chip in something, for they are otherwise enjoying cost-free the spoils of the host. If we apply this to NATO, Germany is being grossly impolite. It is benefiting from the collective security NATO provides (i.e. the barbecue) but is contributing way less than what it should (as you mentioned somewhere above, only 4 of its 148 Eurofighter Typhoons or something like that are actually viable to fly) and this is a problem that should be rectified.
Again, I accept your point that the SCS and other geopolitical problems facing the US probably shouldn’t be a NATO issue, after all China building islands in the ocean isn’t infringing on the sovereignty of any current NATO members, and with hindsight and reflection this example was misguided.
And you’re welcome for the reply. I think perhaps one reason why replies are scarce is firstly because we’re not notified of comments/replies on the website. I’ll try my best to go out of my way to respond, but with other articles to write (and my prospective undergraduate reading lists to start on and a job to work) this means – and I can only speak for myself here – that it’s extremely difficult to respond quickly or in good capacity. I’m fortunate enough that I got a few hours to myself to respond to your comments, and I hope I can continue to do so in the future.
Pretty good for an 18 year old Joe! If only a fraction of pols many decades your senior had half as much of a grasp on geostrategic reality as you display.
Very good!
Cheers.
Well first I echo Helions sentiment, fantastic writing and knowledge of geopolitics & strategy at 18. I’m fairly young (in my 20’s) but the big 30 is just round the corner and all i cared about at 18 was where my next pint was coming from, so excellent stuff Joe.
In regards to the SCS and global issues in general, I think we can agree that sometimes the west will want to intervene, defend and promote their own interests in a specific region, sometimes i disagree (Libya) sometimes i agree (SCS). You’re proposal to help this issue is for countries in mainland Europe to increase defence spending, and we have already agreed most of those countries would not increase their defence budget to send their military to the other side of the world, SCS for example, so it’s not a European NATO issue (which you agree with)
Well here is an idea and it is not mine, it has been mentioned time and time again by men like Ivo Daalder, who is a former US ambassador to NATO and was Barack Obama’s foreign policy adviser.
How do you instantly add $125bn worth of military expenditure to NATO? you bring in Japan, S Korea, Singapore and Australia.
I’ve said it before on here, NATO should expand globally, it fixes all problems. Former NATO gen sec Rasmussen talked about it frequently and even got a rebuke from the Chinese peoples daily newspaper over it.
It increases collective security, removes pressure on European leaders to provide assets outside of Europe, increases total NATO defence expenditure, and allows members that do want to intervene around the world like Britain and France a bit more freedom and reassurance.
Also importantly (I will go along with a hypothetical Russian conflict) put an even bigger second front on Russia’s far eastern border in the pacific, as added to the huge US pacific fleet would be the navies of other NATO Asian allies, with Japan a very important ally given it’s proximity to Russia’s far eastern coast.
And that is the tip of the iceberg, I picked those four as i believe they would sign up tomorrow, lots of other countries in the region, and not just that region either. You talked about BRICS, and that is just economical at the moment, well bring in Brazil, S Africa and India into NATO to beat them to the punch.
Perhaps that is an idea you can take going forward as well as your points in the original article.
“However, the fact Russia has used the absorption of Crimea to solidify and move forward Naval forces (i.e. Sevastopol Naval base) – as well as thousands of troops moved into the region – as proof that Putin has used the absorption of Crimea as an opportunity to move conventional forces less than 2000 miles from Europe’s borders”
True, and he is loved in Russia for doing so, it was the first opportunity that came up that Russia could retaliate against NATO’s eastward expansion (which they were told would not happen unofficially) How many thousands of troops have we put on Russia’s borders, Russia’s action was a reaction, it was not an unprovoked provocation like the media make it out to be.
I don’t think it’s a case of Putin being bullied, and he certainly isn’t bullying the west, Russia has fundamental problems of it’s own.
Anyway i’m moving on from Russia because i could go on for ages.
Fair shout about the EU, i agree there is a lot of discontent around the EU at the moment, i believe it needs massive reform and a new economical model not constrained by the ECB, having said that there is still loads of support for the EU around Europe, and those European countries are still recovering from the financial crisis. Although the whole European population is not unified, the political establishments certainly are, yes there is opposition but remember opposition, both public and political are vital clogs in western democracy, so they’re not necessarily signs of disaster.
Germany, everyone always talks about the percentage of GDP, well this is from Forbes, July this year with actual numbers for defence expenditure in 2017 in US dollars.
US – 685,957
U.K – 55,237
FRA – 45,927
GER – 45,472
God knows what they spend it on unless they have a secret U-boat program running because by all accounts some of their armed forces are in a mess, but i’m also not an expert on German defence, it’s easy to read a bad news article in this country but that does not give you the entire picture of their armed forces. But going by official numbers they spend as much as France so i don’t get the fuss.
And yeah I understand everyone who writes these articles may not have the time to respond, it’s good you have and i’m very pleased with this discussion, don’t worry if you don’t have the time to reply to this, i hope you get the results you wanted and wish you well in your studies, you clearly have a bright future.
I will look forward to your articles in the future.
Hi Sole,
I think we’ve pretty much cleared up and found a middle ground on most of our points. Your suggestion of adding Australia, Singapore, Japan etc into NATO is an interesting one. However, if adding Estonia, Akbania, Montenegro etc antagonised Russia (the eastern expansion you yourself identified) then it would probably tick off a great deal many more to add people such as Japan – especially considering how volatile neighbours such as N Korea and China can be. I think Japan as Major non-NATO ally status may as well be protected under Article 5 anyway, as would Australia etc. Although I agree it would strengthen the alliance to introduce them, I’d worry as to whether it might cause more harm than good to the alliance. Although, I’m not exactly a seasoned diplomat or militaristic expert so I can’t honestly claim to have the most informed opinion on this, it would simply be my gut feeling and from what I know about the region.
Some comments from the DS yesterday…
https://news.usni.org/2018/08/07/u-k-defence-secretary-never-underestimate-nation
Cheers!
“We need to have mass in our air land and sea forces”
Who is he kidding?!!! Certainly not NATO or the US.
We have no mass whatsoever.
On a brighter note…
https://www.defensenews.com/global/europe/2018/08/03/despite-brexit-leonardo-see-a-way-the-uk-tempest-fighter-could-win-eu-funding/
Cheers!
It’s very interesting how many commentators still look at growth, wealth and population levels as an indicator of future military power and influence.
In some cases history shows it has been, but It’s far more complex than that and is generally about infrastructure, will and ability to focus power. On paper William had no hope, The American revolution should have been nothing more than a side show, the economic super power India should have laughed off Britain as a slight tickle, a tiny island creating the largest empire ever known in history, like that would happen. Germany (a defeated economic basket case nation 15 years earlier) taking on the largest Empire in history and the third republic and taking them apart to the point only Geography saved one of the two super powers, like that would happen.
China has money and men but the question is what will it do with them, can it turn that into applied global power or will it go no where and stay regional. India has money and population but can it use that wealth and population, it failed once ( it was the economic superpower of the late Middle Ages, yet folded to what was in affect a cartel of British businessmen).
We also have a new game in town that people a still trying to pretend makes no difference. Global warming is the geopolitical time bomb that is going off in the next fifty years and it going to knock players off the map like nine pins, a large population is just a weigh dragging you to the bottom if you can’t feed them and have no water. The power currency of the new world will be good food and water and where you live not killing you, if you have it Keeping others out will be the the only game in town and if you don’t pretty much the end of your nation as a political entity if you can’t secure it.
Look at the 3 degree ( that’s where we are going if we are lucky) impact assessment maps on the food and water ( the EU published them a while back) in 50 years (when we decommission lizzy ) Africa will not be a place for geopolitics, just the dead. China will have a choice, watch its billions die or move north ( 3 degrees will make a chino Russian war inevitable). The US will be effectively desert and will need it’s northern neighbor to feed it. India is literally between the mountain and the deep blue sea with no food production in sight.
If your not, Canadian, Northern Europe or Russia ( Siberia is looking green). You are looking at a no food game, with the losers starving.
The geopolitical future is looking so bad by the 2040s if we are not spend massively on defence I will eat my zimmerframe.