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Europe's Defense Investment Gap

Foreign policy disputes between Europe, France in particular, and the US are mounting, and not only over the Israeli-Palestinian bloodbath and the conduct of the anti-terrorism war. But Europe's criticisms, no matter how sound, will not be taken seriously by the US so long as the Continent continues to free-ride on America's defenses, something it has done for half-a-century. In a bellicose world, a credible voice in the international arena requires a creditable military capability and high-tech military technology. In both, Europe is lacking.

America's irritation with some of its European allies - Tony Blair's UK being the noticeable exception - is understandable. In the current fiscal year, the US will spend an additional $50 billion on defense, raising its overall defense bill to $379 billion, more than 3% of GDP. This sum is, in fact, low by post-WWII standards. At the time of the Gulf War of 1991, US defense spending was 4.8% of GDP; it was far higher in the 1950s and 1960s.

Europe's commitment to defense tells another story. Defense spending is 1.6% of GDP in Germany, 2% in Italy, and 1.5% in Spain; only France and the UK reach 3%. But confining discussion about defense commitment to the percent of GDP spent on the military is insufficient because there are economies of scale in defense spending. So one would expect that smaller countries will spend proportionally more on defense than larger ones. Instead, today America alone spends more than most of its NATO allies combined, and defense spending in the US is likely to increase even more in the years to come.

Security and global influence are not the only benefits that come through military expenditure. About 10-15% of US military spending finances basic research and thus provides a powerful boost to America's high-tech research and development. The internet, based on thinking and spending made in the 1940's, and the silicon chip, developed in the 1970's, are both products of research funded by the Pentagon.