Recently, UK defence expenditure as a percent of GDP remained at 2.1% in 2017, the Ministry of Defence’s international defence expenditure report claimed.
Total NATO expenditure was set at $959bn, an increase of $30bn since 2016. This increase primarily came from a rise in defence spending in the USA and Canada.
Compared to 5 members in 2016, only 4 members met their 2% of GDP defence spending target in 2017: the US, Greece, the UK, and Estonia. Poland slipped the threshold below to 1.98%.
Interestingly, the country with the smallest spend on defence as a percentage of GDP, Luxembourg at 0.55%, also had the largest proportion of their defence expenditure spent on equipment, at 42%.
Globally, the top four defence spenders have been the same countries since 2014 (USA, China, Saudi Arabia, Russia), although Russia has fallen from 3rd to 4th place this year.
One challenge we face is from a more assertive Russia. What we’ve witnessed in recent years is an increasingly dangerous and unacceptable pattern of behaviour: Russia’s aggressive actions in Ukraine; its military build up from the north of Europe to the Middle East; its use of hybrid tactics, cyberattacks, disinformation, interference in democratic elections; its efforts to undermine the international rules-based order; as well as the offensive use of a nerve agent in the UK, the first time on NATO soil. Unfortunately, there is no indication on Russia’s part of any willingness to change, so NATO will maintain its dual track approach to Russia: strong deterrence and defence, combined with the continuing search for meaningful dialogue.
But this is not the only challenge we face. Since the 9/11 attacks on the United States, NATO has been at the forefront as well in the fight against terrorism. Hundreds of thousands of our armed forces have fought side by side in Afghanistan. Many have made the ultimate sacrifice, including more than 80 French soldiers. We honour them.
We also see instability and turmoil in North Africa and the Middle East, leading some to commit extreme acts of violence and many others to flee for their lives, leading to the largest refugee and migrant crisis in decades. Again, NATO is making efforts to project stability in those countries, because if our neighbours are more stable then we all are more secure.
At our Brussels Summit in July, leaders took the decisions needed to bolster our security, including in the fight against terrorism. To help prevent ISIS, or Daesh, from returning, we have launched a new training mission in Iraq to establish professional military schools for the Iraqi forces. We also agreed to increase our support for Jordan and Tunisia, to strengthen their ability to combat terrorism. At the July Summit, leaders agreed also to bolster our deterrence and defence with a new readiness initiative, the Four Thirties: 30 mechanised battalions, 30 air squadrons, and 30 combat vessels, ready to use within 30 days or less. In response to increasingly sophisticated cyberattacks, we are ensuring that we are as capable in cyberspace as we are in the other three domains of operation: air, sea and land. Several Allies have now offered up their cyber capabilities to NATO, and Allies work closely to thwart such cyber attacks.
We are updating our command structure, with a new command for the Atlantic, based in Norfolk, along with ACT in the United States, and a new command in Ulm, Germany, for support and logistics. Both of these will help our forces become more mobile, enabling rapid reinforcement across the Alliance and across Europe, and ensuring we have the right forces in the right places at the right time. Also, we must ensure that they are at a higher state of readiness.
In recent years, NATO and the European Union have achieved an unprecedented level of cooperation, working together on issues as diverse as maritime security, countering hybrid warfare and fighting terrorism. We exchange real time warnings on cyberattacks, increasingly participate in each other’s exercises, including this very month the so-called PACE exercise that the European Union is running. We also work closely on strategic communications and countering propaganda, among other things. These are areas that are so critical to addressing the disinformation that is constantly flowing now in this, as I say, hybrid warfare environment.
These are the steps we are taking to ensure, at a time of increased instability, that our people are safe. But this does not come for free. That is why, in 2014, every Ally agreed to stop cutting defence spending and to gradually move toward spending 2% of gross domestic product on defence. We affirmed this defence investment pledge at the Warsaw Summit, and reaffirmed it strongly at our July Summit this year in Brussels, with a renewed sense of urgency and a renewed sense of purpose. We have made significant progress; 2018 will be the fourth consecutive year of rising defence spending. This year, European Allies and Canada have boosted their combined defence budgets by over 5%, to 5.2%, the biggest increase in real terms in a quarter of a century. Over the past two years, those same countries have spent a cumulative US$41billion more on defence, and this is significant. There is still a long way to go however. We are heading in the right direction, but we have much more work to do.
Every nation is now committing to develop credible national plans on how they will get to 2%. Allies will deliver those plans by the end of this year and, when the Defence Ministers meet next February, they will be reporting on progress made. I very much welcome the fact that on the eve of La Fête Nationale, President Macron and the French parliament signed into law France’s commitment to reach 2% within the next military programme period. France is once again leading by example.
But this is not just about money, by any means. It is also about how we spend that money, the capabilities we obtain with it, and our commitment to then use those capabilities to protect our nations and our citizens. Again, I very much welcome these same messages being hit so hard by Minister Parly and her remarks just a few moments ago.
In addition to national efforts, common funding continues to be a vital expression of Alliance solidarity and cohesion. It may be relatively small compared to overall spending, but common funding has an important multiplier effect, enabling us to sustain our command structure, our common platforms, such as AWACS and the new Alliance ground surveillance system (AGS) and to enhance our interoperability through investments in command, control and communication.
The new governance model for the delivery of commonly funded capabilities, endorsed by leaders at the Brussels Summit in July, is a key step forward. I know it has taken time to come to consensus on this, and there is still more work to be done, but it is a good example of what having an honest assessment and daring to think in new ways can accomplish.
Ladies and Gentlemen, as our security environment becomes ever more complex and less predictable, we need to increase the resources we commit to our defence, and we need to do more with those resources, for our defence to remain coherent and credible. You, our resource community, have a central role to play in support of the adaptation of our Alliance, to meet the challenges that we face. I call on you all to use your deep knowledge, your excellent experience, your imagination,s indeed, to help that ongoing process of adaptation in the years and decades to come. Too often, people think of resources in terms of constraints only, but resources are also a wellspring of opportunity, including in this Alliance. So, as you meet today and tomorrow here in Paris, and as you continue your work in capitals or in the field, or wherever you currently call home, I urge you to embrace the opportunity to help us safeguard the freedom and security of the nearly one billion citizens that make up the NATO Alliance.
So, thank you very much for the opportunity to speak to you this morning. I wish you all the best for a successful conference and I look forward to hearing the results of your discussions. Thank you very much.”