NATO member countries met in Brussels in July to discuss common defence and security issues, including the commitment to the 2% GDP target. Prior to the summit, US President Donald Trump criticised the level of overall defence spending among other NATO countries and the apparent lack of burden sharing.

While much time is given by the media and politicians to the well-known 2% GDP target, there seems to be little attention to the other NATO target, agreed at the same time, but arguably more meaningful: the 20% equipment target.

Hang on…there are two NATO targets?

Yes – at the 2006 Riga summit, NATO members agreed two targets for defence spending: that 2% of a member’s GDP should go towards defence expenditure, and that 20% of defence expenditure should go towards the development and acquisition of equipment.

Historically, the US has spent a far greater percentage of its GDP on defence than any of the European members. The introduction of the 2% target was perceived as achievable goal in an attempt to address this imbalance.

The 20% target was to ensure that NATO members have the right military equipment and capabilities to conduct its missions.

Some argue that the 20% equipment target is more meaningful than the 2% GDP target. While a country may achieve the 2% GDP target, if its military didn’t have adequate military equipment, the overall effectiveness of their force would be diminished. At the Wales summit in 2014, the then UK Prime Minister David Cameron said in his closing press conference: “it’s not just the amount of money that matters; it’s also about spending on equipment you can actually deploy.”

At the same summit, NATO members agreed that those countries currently achieving the two targets would continue to do so, whereas those who were not would aim to achieve the targets by 2024.

How many members have hit both targets?

Not many. As you can see from the animated chart below, since 2006 only eight countries have ever achieved both targets simultaneously: Bulgaria, France, Greece, Latvia, Poland, Turkey, the United Kingdom and the United States.

Alt text

The last time Bulgaria, France, Greece and Turkey achieved the double targets was quite some time ago (2008 and 2009). It’s only been from around 2015 that Poland and Latvia have hit both targets. Only the US has met both targets every year – the UK nearly did so, although in 2012 the equipment target was not achieved.

What if we just focus on the GDP target?

Only one additional country has ever met the GDP target: Estonia, although it has done so consistently since 2015. Aside from the UK and US, only Greece has met the GDP target every year since 2006.

…and the equipment target?

This is where matters do improve. Since 2006, 18 countries have achieved the equipment target in at least one year: the Czech Republic, Estonia, Italy, Lithuania, Luxembourg, the Netherlands, Norway, Romania, the Slovak Republic, and Spain, in addition to those members mentioned earlier.

Just before the financial crisis of 2008, around eight countries were achieving the equipment target. By 2012 there were only four. Since 2014 the number of countries hitting the target has increased year on year. It’s estimated that in 2018, 15 countries (just over half of all NATO members) will achieve the equipment target – the highest number ever. For the Netherlands and the Slovak Republic, 2018 will be the first year in which they have ever hit the equipment target.

As with the GDP target, some countries have been more consistent than others; only France, Turkey and the US have achieved the equipment target every year since 2006.

When might all members achieve the targets?

It’s hard to say. In recent years it appears that most countries have begun to increase their spending towards both targets, although this could change between now and 2024 (the year agreed at the Wales summit). It should be noted that NATO imposes no sanctions or penalties on countries who do not meet the targets, and that they hold no intrinsic significance – the targets do not represent any type of critical threshold or ‘tipping point’ in terms of defence capabilities. That said, both targets are symbolically and politically important as it shows commitment among NATO allies to their shared defence.

Noel Dempsey is a Senior Library Clerk at the House of Commons Library, specialising in defence.