The NATO Defense Burden and Europe’s Spending Imbalance

This piece is part of an ongoing series exploring the challenges faced by the NATO alliance. For over thirty years, the United States has shouldered most of NATO’s military responsibilities, while many European allies have found it easy to keep their defense spending relatively low, to the dismay of U.S. leaders.

This ongoing disparity has endured through different U.S. administrations, spanning the Cold War and beyond, with numerous discussions about fair distribution of defense costs. It wasn’t until recently, notably after Russia invaded Ukraine in 2022 and amid renewed pressure from President Donald Trump, that many NATO members started to ramp up their defense budgets.

But what explains this persistent gap?

Analysts suggest that a mix of post-Cold War optimism, national political priorities, and the security blanket provided by the U.S. has convinced many European nations that slashing defense budgets was feasible without compromising their safety.

Barry Posen, a political science professor at MIT, remarked that “for much of the era after the Cold War, Europeans have underinvested in defense—partly because the perceived threat was minimal and also due to repeated assurances from U.S. presidents about America’s long-term commitment.” The collapse of the Soviet Union only reinforced this sentiment.

With the principal threat NATO was established to counter suddenly vanishing, many European governments sought to reap the “peace dividend,” reallocating resources from their military efforts to domestic agendas. Between 1992 and 1999, defense expenditures among European NATO members dropped by 22%, solidifying a pattern of chronic underinvestment that persisted for decades, even as the U.S. maintained a military presence in Europe.

A Shift in Priorities

As defense budgets dwindled, various European administrations expanded social welfare programs, including healthcare, pensions, and education—items that became quite ingrained in domestic politics and tougher to cut compared to military spending. This situation created a lack of urgency for change, given the U.S.’s dominant role in NATO’s military muscle. Some critics argue this led to a scenario where U.S. taxpayers were essentially subsidizing European security, enabling the EU nations to allocate more resources to local concerns.

This scenario has been described by some defense experts as creating a “moral hazard.” The unshakeable U.S. commitment to NATO allowed European allies to reduce their military budgets without facing the immediate repercussions of their choices.

As this dynamic played out, dependence on U.S. military capabilities increased, covering areas like logistics, intelligence sharing, and nuclear deterrence. NATO Secretary-General Mark Rutte reaffirmed this idea, stating that “we still benefit from a strong U.S. presence in Europe,” noting that America’s nuclear capabilities remain a critical security guarantee.

Concerns regarding burden-sharing aren’t a new development for NATO. President Dwight D. Eisenhower raised similar alarms back in 1953, urging European allies to share the alliance’s defense costs. This issue continued to rise over the decades, often surfacing as administrations pushed for greater European investment in collective defense.

Even after the Cold War, these warnings persisted. In a candid address in Brussels in 2011, then-Secretary of the Army Robert Gates cautioned that NATO could face a “bleak, if not dire future” unless European nations began to prioritize military spending more seriously. He highlighted a “declining patience” among U.S. lawmakers for a lopsided defense contribution.

Despite years of caution, the incentives for change have remained relatively constant. The U.S. has maintained its NATO commitments, traditionally ensuring significant military resources on the continent, which has eased pressure on allies to boost defense budgets.

Jim Townsend, formerly with the Defense Department, stated that each administration has pushed for allies to invest more in their defense, with renewed emphasis after Russia’s annexation of Crimea in 2014. NATO even established a guideline for member states to allocate at least 2% of their GDP to defense. While spending has ticked up gradually, progress across NATO has been inconsistent.

“Change has been slow,” Townsend noted, observing that while some allies have started moving towards higher spending, the pace remains frustratingly sluggish.

Moreover, the ongoing disparity in burden-sharing often unfolds in a predictable way: U.S. officials advocate for increased spending, European leaders pledge to make adjustments, and yet NATO continues to heavily rely on U.S. military support. According to Townsend, the catalysts for breaking this cycle have been Russia’s assertive actions and Trump’s uncommon stance on NATO obligations.

“Two major factors changed the narrative,” Townsend explained. “One was Putin’s invasion in 2022. The other? Trump.”

President Trump was notably different from his predecessors. He questioned whether the U.S. should provide protection to allies not meeting their defense spending commitments. Throughout both of his terms, he regularly highlighted that some NATO nations were taking advantage of American financial support, suggesting that U.S. defense should not be taken for granted.

How European leaders interpreted this, whether as a wake-up call, a threat, or a negotiating tactic, is a complex issue. Regardless, it prompted a reevaluation of long-standing assumptions within the alliance and sped up discussions that had been pending for years.

The outcome was most apparent in a NATO summit in The Hague, where an ambitious target was set for allies to spend 5% of their GDP on defense and related investments by 2035. This shift represented a significant increase from NATO’s established standard of 2% and acknowledged a growing consensus that the security climate today is far grimmer than the one seen after the Soviet Union’s dissolution.

It was a clear sign that many NATO members finally realized what U.S. presidents have highlighted for years: the era of cuts to military spending post-Cold War has come to an end.

Challenges Beyond Spending

Yet, experts caution that rebuilding military capabilities involves more than just budget increases. Townsend pointed out that Europe still relies heavily on U.S. support in several critical areas such as air defense, logistics, and intelligence sharing. Even if nations decide to boost defense budgets, turning those funds into effective military readiness would be a lengthy process.

John Byrne from Concerned Veterans for America emphasized that the challenges go beyond mere numbers and expenditure. He pointed out, “There’s a lack of experience,” referring to the fact that multinational military operations in the past were predominantly led by American commanders.

Executing large-scale coalition military actions requires years of institutional knowledge and leadership skills, which can’t be cultivated overnight. “Equipment can be purchased easily,” Byrne noted, “but command experience takes time to develop.”