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20th Jan 2020

Nato to make cutbacks amid budget crisis

  • Fewer Nato meetings mean lower costs (Photo: Nato)

The number of meetings held at Nato and the number of people employed by the body may be cut back amid dwindling defence budgets in member states, with the alliance now operating in the red, it emerged after a meeting of defence ministers in Brussels.

"All member states in Nato are faced with economic challenges. All governments are faced with budgetary constraints. So, they would expect the alliance to follow suit," Nato chief Anders Fogh Rasmussen said after a dinner with defence ministers on Thursday (10 June).

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He tabled a series of budget-cutting proposals mainly aimed at trimming Nato's headquarters, military command structures and specialised agencies. The final decision will be taken in October by ministers meeting one month ahead of a Nato summit in Lisbon.

"We will cut the number of committees in this building by three quarters, to less than one hundred. So we will all spend less time in meetings, which I consider a significant contribution to efficiency," Mr Rasmussen argued.

A former Danish Prime Minister, Mr Rasmussen has for a long time defended the idea that the economic crisis can be used to transform Nato into a more cost-efficient and transparent organisation.

Military budgets of Nato states are expected to be slashed in most countries, which will lead to "savings and deferrals amounting to €1.5 billion," he explained.

With austerity measures being taken in most European states, the alliance's own budget has come under strain, as members find it increasingly hard to cobble together Nato's annual budget of €2 billion.

For the first time in its 60-year history, Nato is now operating in the red. At the end of May, the specialised publication Intelligence Online wrote about a deficit of €430 million in 2009. Frankfurter Allgemeine Zeitung on Wednesday also wrote about a "historic" €500 million deficit.

Germany and Britain supported Mr Rasmussen's proposals. "We want to see a more efficient and more deliverable Nato," British defence minister Liam Fox said, while German undersecretary of defence Christian Schmidt said that NATO's bureaucracy and top-level military staff should be "compressed."

Statistics show that in 2009, only five members out of 28 met the Nato requirement of spending two percent of GDP on defence: Albania, Britain, France, Greece and the US. Two other members, Bulgaria and Turkey, dropped below this threshold after reaching it in 2008.

Spending among other members ranged from 1.9 percent in Estonia to 0.5 percent in Luxembourg, while spending in Germany - which just announced massive defence cuts - stood at 1.4 percent.

The cutbacks raise the question of Nato's decreasing power and influence, particularly in new member states from the former Communist bloc. In the conclusions published on Friday, defence ministers sought to alleviate these concerns.

"We will continue to demonstrate the alliance's capability to provide a visible assurance of Nato's commitment to collective defence. We are determined that our national decisions on defence programmes and budgets will take into account what we need as an alliance," the text says.

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