NATO is a Trillion Dollars in the Hole

Examining the mathematics of the US’s involvement in European land wars

The United States temporarily suspended military aid to Ukraine yesterday, while European leaders collectively screamed at Donald Trump and panicked about their own national security. Domestically, Americans are heavily split over what course of action the United States should take. All Americans engaging in this argument should take the time to develop a view of our involvement in Ukraine, NATO, and Europe in general, rooted in mathematically testable claims.

The current Russo-Ukraine war is not a “fair” one, and Ukraine would have lost long ago if not for direct foreign military aid. Direct military aid to Ukraine flows almost entirely from a small number of European border countries and from the English speaking west, mostly the USA. When Europe says they “stand behind Ukraine,” that is a mathematically testable claim.

It is objectively true that Donald Trump has misrepresented repeatedly the nature of the NATO alliance, when he says that they “don’t pay their bills,” “dues,” “NATO fees,” or that they “owe us a tremendous amount of money.” That’s not how NATO or any other alliance works, and the fact checkers are right on that account. But Trump’s overall point - that NATO is a one-way alliance with the United States pulling all the weight, while the rest of NATO members hide under our security umbrella and ride our coattails - is also a mathematically testable claim.

When these claims are tested, we discover that most of Europe doesn’t give a singular fuck about Ukraine and that non-US NATO members are collectively a trillion dollars in the hole on their NATO spending obligations. Europe is in a predicament of their own making, and is lashing out at the United States like children refusing to eat their vegetables.

Let’s crack our knuckles and visualize some data.

The NATO 2% Shortfall

At the Wales Summit in 2014, every NATO member pledged to spend approximately 2% of their real GDP on military readiness. The guidelines are specific, they define “readiness,” they mandate certain ratios be spent on hardware and other specific elements of readiness, and NATO tracks progress towards these targets on a year by year basis. The 2024 report can be downloaded here. While the NATO website claims that NATO members have been continually increasing their spending to reach the 2% target, that’s not at all what the data looks like when graphed.

In this graph each line is a NATO member state, and the red blob is spending below 2%. With a few exceptions such as Poland, Greece, the US, and the UK, basically every country rode most of the last decade below the line. While there is a trend upward in the spaghetti graph above, the trend only starts in 2023 after the Ukraine invasion. Prior to that the trend was basically flat or irregular for almost every member nation, and most of the countries over the 2% line in 2024 only barely reached it with a brief two year spending spree.

These prolonged stretches of thumbing their noses at the 2% target can be easily seen when you take the decadal average of NATO defense spending as a percentage of GDP.

Only the UK, Poland, Greece, and Estonia are pulling their relative weight. The NATO total is borne almost entirely on the backs of US spending. But Luxembourg being light in the wallet probably doesn’t affect Europe much, so to see the real impact you need to look at real dollars. To find out that number, we would need to take the percentage each country is short of 2% on any given year, multiply that times their GDP for that year, and add all the years up to produce a total representing the entire decade of shortfalls. The data to do so is all within the NATO 2024 report, so I saved you the time.

Adjusted for exchange rates to millions of USD and inflation-normalized to 2015, these are the countries responsible for the real shortfalls:

Over the course of the last decade, NATO members are short 992 billion dollars, which translates to well over a trillion when we tack on nine years of inflation. Germany’s quarter trillion shortfall alone constitutes 23%, with Italy, Spain, and Canada each clocking in around 13% to 14% of the total shortfall. The top four are responsible for two thirds of the shortfall, and the top nine are responsible for 88% of it. Germany is responsible for more shortfall than the twenty four lowest countries combined. The only European NATO country with a trillion plus dollar GDP pulling its own weight is the United Kingdom, and all the other major European NATO powers are completely taking advantage of the US security umbrella.

3%

After watching the Trump highlights on Twitter over the weekend, many European leaders got together to figure out what they would do if the US umbrella folded up. French president Emmanuel Macron suggested they bump the 2% spending obligation to 3%, which is a bit funny considering France only managed to make it to 2% last year. If achievable universally and immediately, the excess 1% spending would compensate for the last decade of foot-dragging in around four years. That would be positive for them.

But they only achieved 2% because of fears around the Ukraine war. Absent that war they wouldn’t have hit the 2% target until 2030, and wouldn’t hit Macron’s new 3% target this century. At pre-war spending trends they wouldn’t make up for the historical shortfall until around the year 2050. Trump was probably trying to say that when he made improperly worded claims about NATO not “paying their bills.” Prior to Putin’s invasion of Ukraine, NATO powers were effectively using the United States military as a national security credit card.

If the European countries hadn’t been bailing on their military responsibilities for the last decade, and had more robust military assets in place right next door to Ukraine, then they might have more to throw Ukraine’s way today.

If they wanted to, that is, but it appears they generally don’t.

Ukraine

The Zelensky-Trump fiasco last week truly kicked off at the four minute mark of this video.

Zelensky makes the case that the United States will “feel the effects” if we do not stop Russia in Ukraine, which leads Trump to get oppositional for the first time in the exchange. Vance was a little spicy before, and probably should have stayed on the sidelines given that VP is a worthless throw away position, but Trump only initially steps in to oppose the assertion that Putin winning in Ukraine would be bad for the USA. And in this moment, Trump is unassailably correct. Americans won’t notice if Ukraine falls to Putin, because we barely noticed back when Ukraine’s government was under the thumb of Russian soft power in 2013, and we barely noticed Russia’s invasion of Crimea. We were all reading about Michelle Obama doing the #BringBackOurGirls thing in Nigeria while the Russian military was settling into their new Crimean digs. We didn’t care then and we won’t notice now.

Zelensky needed to make this case to Europe instead, because Europe could encounter major changes if Ukraine falls to Putin. Ukraine is Europe’s breadbasket, a location of rare earth elements, and contains the two most important pipelines to Russian and Middle Eastern oil since Ukraine (probably) bombed Nord Stream. Most Americans can’t find Ukraine on a map, but Europeans can take a train there. Is Europe contributing to the defense of Ukraine against Russian aggression? Not significantly.

One year ago HWFO did an analysis of the relative contribution of different European powers to the defense of Ukraine, and showed that military aid by a percentage of GDP was very high by countries within Russian striking distance, but basically nonexistent outside of that window.

I redid the entire graphic today to check on the trends, and see whether Europe outside the little orange box has changed their opinion about the invasion of Ukraine over the past year.

They have not.

Keep in mind these are based on percentage of GDP, so as to not discount Estonia’s noble contribution of 2.02% of their entire GDP towards the cause of Ukrainian weapons. In real hardware, the US still constitutes half the foreign direct military aid.

Europe has a huge gap to close in terms of weapons supply and funding if the United States pulls our support. Most of Europe has not contributed meaningfully to this war even though they’re the ones who stand to lose the most, and we stand to lose nothing.

Mathematically Testable Claims

When Trump infers that NATO is a raw deal for the United States, that NATO countries are piggybacking off of our security, and that they aren’t pulling their weight even though the real security threat is to them instead of us, his claim is mathematically correct.

When Europe says they “stand behind Ukraine,” that claim is mathematically correct for the United Kingdom and countries within about 650 miles of the Russian border, and a complete lie for the rest. Furthermore, the outlays they do have fall tremendously short of the aid necessary to prolong the current bloody stalemate, which means they’re basically standing behind the USA standing behind Ukraine - a hollow gesture which will completely evaporate if we walk out the door.

In my experience, Americans fall into two general camps when it comes to NATO funding, Ukraine backing, and similar issues. One camp doesn’t see what they gain from backing Ukraine, nor from NATO, neither individually nor as a country. If you are in this camp, your grievance is real and has been left unanswered and unaddressed.

The other camp feels a moral obligation to defend both Europe and Ukraine from Russia. If you are in this camp, your primary grievance should rightfully be with Vladimir Putin, but your secondary grievance should not be with Trump or your neighbors, it should be with Europe and Ukraine’s neighbors, who obviously don’t share your moral obligations to defend Ukraine, nor to even defend themselves.