NATO points to ‘severe consequences’ on global budgets from coronavirus crisis

WASHINGTON — The coronavirus crisis will have severe consequences on government budgets, but also reinforces the critical need to continue investment in defense and security, the head of NATO said during the release of the alliance’s 2019 annual report.

For the first time, NATO Secretary General Jens Stoltenberg unveiled his annual report with a virtual news conference.

“We live in an uncertain world,” he said. “It is more important than ever that we stand together, work together and support each other. That is what NATO is all about. NATO remains committed to its mission of providing peace and security.”

Stoltenberg conceded that allies will take a financial hit, though he was cautious to not predict any reductions in defense spending.

“There will be severe economic consequences of the coronavirus crisis,” he said. “And in the short term, consequences not only for the total economy but for government budgets. When we think about long-term consequences, that is too early to say anything with certainty. You have to remember that when NATO allies agreed to invest more in defense, they did so because we live in a more uncertain, unpredictable world. This has not changed; I expect allies to stay committed to investing more in our security. We also need to remember that by investing more in our security and armed forces, we’re providing surge capacity for all our societies to deal with unforeseen events, crisis and natural disasters, as we for instance see now.”

Some NATO allies are providing support to civilian populations with logistics, medical services, clearing of public places and control at the borders.

Looking at the past year, 2019 marked the fifth consecutive year of growth in defense spending for European allies and Canada, with an increase in real terms of 4.6 percent from 2018, according to the report.

Nine met the guideline of spending 2 percent of their respective gross domestic product on defense, up from just three a few years ago. By the end of 2024, European allies and Canada expect to contribute $400 billion to defense budgets, compared to $130 billion between 2016 and 2020.

“The $400 billion reflects that NATO allies all have increased defense spending significantly, based on national plans submitted to NATO, and I expect them to stay committed knowing they are facing a difficult situation, including the short-term, severe government consequences of coronavirus,” Stoltenberg said during the news conference.

In 2019, the United States accounted for 52 percent of the alliance’s combined GDP and 70 percent of combined defense expenditure. Total NATO military spending in 2019 is estimated around $1 trillion.

Allies also made progress on the commitment to invest 20 percent or more of defense expenditure in major new capabilities, with 16 meeting that guideline. Combined, European allies and Canada spent about $66 billion on major equipment as well as associated research and development.

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