Home » Economy » Germany’s NATO contribution higher than assumed

Germany’s NATO contribution higher than assumed

by Financial Economy

Germany’s NATO contribution higher than assumed. The member states are to transfer two percent of GDP to NATO. Germany is criticized for being way below that. A study now shows: the gap is not that big.

Germany’s NATO contribution higher than assumed

US President Donald Trump has repeatedly criticized NATO member Germany for insufficient defense spending. According to a new study by the Kiel Institute for Economic Research (IfW), however, the German financial contribution is much higher than generally calculated. The reason for this is the burden of the economic sanctions imposed on Russia, for example. These were included in the study.

You can browse here for economy news.

The study “The Economic Costs of War by Other Means” shows that Germany’s NATO contribution for defense rose from 1.57 to 1.8 percent of gross domestic product (GDP) increases when you include the burden of economic sanctions. The US contribution, however, only increases from 3.87 to 3.88 percent of GDP. The sanction costs for Lithuania are relatively highest at 1.56 percent of GDP, with which the country contributes 3.84 percent of its economic output to the NATO goals.

NATO and the USA in particular no longer pursue geostrategic goals only militarily, but also with economic sanctions, explained the IfW. These caused high costs in countries like Germany and Lithuania, but hardly in the USA. Because this “war by other means” is increasingly being viewed by the USA as part of a foreign policy strategy, “it is justified to recognize its burdens as a” monetary contribution to NATO “, explains IfW President Gabriel Felbermayr .

The calculations are based on NATO data on defense spending and current trade data. Germany and the EU would – including the sanction costs – with their contributions to the NATO goals are only just below the targeted two percent GDP mark. “The US’s criticism of our defense spending is thus clearly weakened,” said Felbermayr.

According to the IfW, economic sanctions by NATO members cause economic damage in the alliance countries of almost 34 billion US dollars each year. The Europeans carry the majority with 29.5 billion dollars. Germany bears the highest economic costs with 8.1 billion dollars. That corresponds to 0.23 percent of GDP. The US is losing just $ 2.6 billion, or 0.01 percent of its GDP.

Source: https://www.spiegel.de/

Related Posts

Leave a Comment