Italy's Unbuilt Military Bridge Illustrates Defense Spending Risks
The reclassification of non-military projects as defense investments is significantly influencing European defense spending, contributing to fragmentation in how defense budgets are reported and executed. This trend, while allowing European countries to present higher defense spending numbers aligned with NATO’s 5% GDP target, masks a lower actual investment in core military capabilities.
According to recent reports, NATO’s new 5% of GDP defense spending target splits into 3.5% for core military capabilities (tanks, jets, salaries, logistics) and an additional 1.5% for broader “security” investments like cybersecurity, telecommunications, disaster response, and infrastructure. Many European countries use this broader 1.5% category to count spending on non-traditional defense projects, such as broadband upgrades, road and runway improvements, coast guard operations, and even policing financial crimes, as part of their defense budgets.
For instance, the UK plans to count projects like street crime prevention and broadband upgrades as defense spending to meet NATO targets without significantly increasing actual military expenditures. Spain’s recent €10.5 billion defense plan includes only 19% for military hardware; the rest covers broader security areas, effectively lowering its “real” military spending despite higher headline figures.
This reclassification results in inflated defense spending statistics that may mask a lower actual investment in core military capabilities. Some countries’ real military spending could be closer to 1.3% of GDP after adjusting for the new accounting rules, despite headline claims of 2% or more.
The broader definition increases fragmentation by mixing traditional military investments with diverse security-related expenditures that may have very different procurement, operational, and strategic implications. Execution challenges exacerbate this fragmentation. Germany, for example, pledged increased military spending but has historically underspent large portions of its allocated defense budget, raising questions about Europe’s ability to effectively absorb and utilize increased funds.
The sheer ambition of tripling military spending across Europe within a short period highlights concerns about capacity constraints, including shortages of procurement staff, engineers, and materials, which further fragment and slow defense build-up efforts.
The trend of reclassifying non-military projects as defense investments allows European countries to present a seemingly robust defense spending profile. However, it leads to a fragmented and somewhat misleading picture of European defense spending, complicating genuine military build-up and raising questions about the effectiveness and execution of these budget commitments.
In light of these challenges, it is crucial for European countries to ensure that their defense spending is focused on core military capabilities and not diluted by non-essential projects. The EU Institute for Security Studies think tank recommends focusing on disruptive research and innovation via a European version of the Defense Advanced Research Projects Agency. It is also essential to avoid projects like a bridge to nowhere that do not yield positive outcomes, as they could further exacerbate differences between European countries and make Europe weaker, not stronger.
References: [1] Der Spiegel, 2022 [2] Financial Times, 2022 [3] Bloomberg, 2022 [4] NATO, 2022
Technology advancements in the realm of cybersecurity and telecommunications, currently classified as "security" investments, are increasingly playing a crucial role in sports events due to the growing reliance on digital platforms for live streaming, data analysis, and fan engagement.
Concurrently, improvements in infrastructure like road and runway developments, often categorized under broader defense spending, are significantly contributing to the enhancement of sports facilities in many European countries. For instance, upgraded transportation networks not only boost sports tourism but also support the movement of athletes and equipment, thereby affecting sports performance.
