Can NATO spend smarter?

Paris At NATOs biannual summit that opened in Wales today, leaders are expected to pledge to increase their spending on defense, a key political issue that has dogged the alliance for years.

The US has argued with European nations over inadequate defense spending for years, and the breakthrough seems to have come with a sense of urgency, as complex threats have multiplied in the Middle East and Russia.

But the pledge is non-binding, and experts say that instead of simple quantity all members are required to spend 2 percent of GDP on defense the benchmark should related to better outcomes: more and cheaper collaboration, focused on specific plans to show members where their money goes and why.

I think the 2 percent goal is a blunt instrument, and like all blunt instruments it has effect, but I think it would better to have a precision-guided theory about the spending, says retired Adm. James Stavridis, dean of The Fletcher School atTuftsUniversity and former Supreme Allied Commander at NATO.The key is spending intelligently and doing it in a way that does not duplicate a lot of effort around the alliance.

Europeans together account for just a third of NATOs annual budget, with the US funding the rest a sore point for many in Washington. Only four members met spending standards last year: the US, UK, Greece, and Estonia.

And even for those that have met targets, like Greece, the money is not always spent in the right way. Too often budgets are dominated by salaries or pensions, or large standing formations and heavy tank units that dont match the nimble, deployable forces that NATO envisions for its future.

You may spend a lot of money on defense, but if you spend it wrong, your armed forces are a lot less relevant for your allies, saysVivien Pertusot, head of the Brussels office of the French Institute of International Relations.

Stavridis says that NATO could give countries specific spending targets on key items, like high-tech interoperable systems, cyber capability, or special forces. Indeed, according to The Wall Street Journal, the recommitment to defense spending includes a pledge to spend 20 percent of the budget on investment, at Germanys pushing.

ChristianMlling, a research fellow at theGerman Institute for International and Security Affairs (SWP) in Berlin, would welcome such a shift in message. He calls the 2 percent target an American-driven illusion, one that many pacifist European nations bridle at. You have to make a business case, and the Americans are not making a business case by saying 2 percent, says Mr. Mlling.

For example, were Germany to increase defense expenditures to 2 percent of GDP immediately, it would amount to 20 billion euros. Mlling says this is unthinkable for Germany, one of Europe's most militarily reticent countries. But by saying we have a problem in the East and the only way to neutralize it is by doing A, B, C, I think the Germans would do it.

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Can NATO spend smarter?