Nato's two-percent of GDP target is a blank cheque to the arms industry

In his opening address at the 75th anniversary celebratory summit in Washington, Nato secretary general Jens Stoltenberg described it as the most "successful alliance in history," claiming recently that its main purpose was not to fight wars but to prevent them.

The people of war-torn nations like Afghanistan, Iraq and Libya, who have suffered decades of instability because of Nato-led wars, might disagree.

It was not the cost of war that topped the summit agenda however, but rather how to maximise profit from it.

As Nato expands so does military spending

Nato was founded in 1949 when its 12 initial members pledged to collectively defend each other in the event of an attack. Though its rival alliance, the Warsaw Pact, was dissolved at the end of the Cold War, Nato continued to expand, particularly eastward, and today it has 32 permanent members and maintains partnerships with the African Union and states in the Indo-Pacific region.

As Nato grows, so too does its military budget, which according to SIPRI hit a record high of $1.341 trillion [€1.2 trillion], accounting for 55 percent of global military expenditure in 2023.

Nato spending is governed by its defence investment guideline - a political agreement and not a legal obligation, which stipulates that members must commit two percent of their GDP to "help ensure the Alliance’s continued military readiness".

Since Russia's invasion of Ukraine in February 2022, Nato has called on all members to increase spending to meet this two-percent target — even though the Alliance's budget and its military capability are already vastly superior to that of any potential aggressor or rival.

In advance of the 2024 summit an exuberant Stoltenberg, sitting alongside US president Joe Biden, announced that a record 23 of Nato 32 members had hit the two-percent target, which he clarified is no longer "the ceiling, but the floor".

Aligning a state’s military budget with a percentage of its GDP says precisely nothing about that state’s military capability. It is an entirely arbitrary figure established by a purely economic criterion. For example, landlocked Luxembourg with a population of just over 672,000 could invest two percent of its GDP in submarines, though it would have no use for them, and the Nato target would have been met. 

Though the two-percent rule is devoid of any rationale or logic beyond boosting militarism and fuelling war, non-Nato members are now also beginning to apply this standard, establishing an unofficial global norm for military spending.

Making a killing

At least one-fifth (20 percent) of the ‘two-percent floor’ must be invested in major equipment and associated R&D. In other words, hundreds of billions of taxpayer money should be directly invested in highly lucrative private arms companies to produce weapons of war. 

According to Nato 2024 spending report, all but two members (Belgium and Canada) fell short of the 20 percent target, with Albania, Finland, Hungary, Luxembourg and Poland spending over 40 percent of their military budgets on equipment and R&D.

Applying the ‘20 percent of two percent’ rule to SIPRI's 2023 figure of $1.341 trillion would see arms companies cashing into the tune of $268bn, though considering that at least five Nato members are already spending over twice this amount on equipment and R&D, this sum is likely much higher.

By comparison, the UN’s Department of Peacekeeping Operations has an annual budget of a mere $6bn to oversee its global operations indicating that states have relegated peace-keeping, diplomacy and multilateralism to the dustbin and are hellbent on pursuing a hawkish war agenda instead.

Still not content with current spending levels however, Stoltenberg announced that Nato would be rolling out a new defence industrial pledge during this summit with a "better outlook for the arms industry" meaning more spending on bigger contracts for longer-term investments. In short — more war. 

He lauded Nato's trans-Atlantic F-35 collaboration as a Nato success story though he failed to mention that these fighter jets are being used by Israel in its genocidal war on Gaza, where UN experts have repeatedly called on states to impose an arms embargo.

Nato is a war alliance

Between banter about baseball, US secretary of state Anthony Blinken said at the summit that Nato is stronger, larger, more fit for purpose, and ready to deal with the challenges of our time.

One of the greatest challenges however is global warming, which is worsened by war with 5.5 percent of global greenhouse gas emissions being produced by the military.

New research from the Transnational Institute, Stop Wapenhandel and others found that Nato's overall military spending last year produced an estimated 233 million metric tonnes of CO2, more than Colombia or Qatar’s entire annual greenhouse gas emissions.

Nato is a war alliance. Far from promoting peace and stability as it claims, it is the single most destructive alliance in history having participated in several wars over previous decades resulting in millions of deaths and driving unprecedented levels of forced displacement and devastation.

If world leaders were truly interested in addressing the challenges of our time then dissolving Nato should be number one on their list of priorities.