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  • Centre for Socio-Political Research of the Republic of Srpska

    Milaković: NATO and money which is(not) a problem

    24. September 2024.

    We serve as witnesses to the fact that events in the relation between collective West-Russia after February 2022. caused tectonic changes in the Euro-Atlantic and Eurasian expanse, with a marked potential to redefine the world order and the distribution of world power. Bearing in mind that these are processes of historical importance, far-reaching and comprehensive, their proper understanding is of existential importance for the Republic of Srpska. The wide range of measures applied by the collective West through the sanctions policy towards Russia are increasingly exerting their negative effect, but on those who initiated them, primarily on European economies, thus shaking the foundations of their strength, importance and influence. An additional factor in the multiplication of aggravating circumstances is created by the West’s spasmodic attempts to contain China’s growth. It is paradoxical that European economies chose, whether independently or under pressure from Washington, to cut themselves away from access to cheap raw materials and energy, while at the same time bringing into question placement of their goods on the globally significant Chinese market. Result of such actions are serious economic challenges, decline in industrial production and living standards, and an increasingly difficult functioning of states, primarily the most developed of them – Germany – but due to a high degree of interdependence, and all others.

    Nevertheless, the European NATO member states commitment to developing new capabilities for purpose of carrying out broad-spectrum military operations prevailed. Analyzing the stated ambitions, it can be rightly said that this is a fundamental change in approach, given the fact that European countries have neglected their military capacities for more than three decades. We should not lose sight of the fact that in the post-Cold War period significant reductions in the number of military personnel and combat equipment were carried out. At the same time, investments in key military capabilities, which would ensure that Europe’s technological and industrial defence base is fit for its purpose, were neglected. The key difference is that the focus of military activities in NATO’s European members during this period shifted from a hypothetical conflict against the USSR to crisis management operations, or so-called peace missions and the fight against terrorism. The survival of such a concept through previous years was only possible due to Europe’s full reliance on the military capabilities of the United States. European countries, due to the lack of adequate self-identity in terms of defense, have made themselves dependent on America. Thanks to the diverted financial resources, they gained the comparative advantage of facilitated economic development and the preconditions for creating a distinctive social policy, since the European budget allocations for defence purposes were negligible. The adoption of a neoliberal approach to the economy at the same time was paid for by loss of the sense of national belonging and traditional values of European peoples.

    However, circumstances are irrevocably changing and Europe, previously so attractive to live in, ceases to be so in contemporary world. Taking into account the nature of the circumstances and global trends, there is no doubt that the given processes will have an impact on the Republic of Srpska. NATO’s new strategic and doctrinal commitments, accompanied by increasing militarization of the European Union, are an integral part of them. It is expected that the pressure of Western countries will intensify with the aim of either integrating the Serbian space into the Western sphere through NATO or its isolation in order to prevent destabilization within the strategic depth of the collective West.

    When analyzing a number of relevant factors that determine current processes, the need to take into account the increased financial defence allocations of member states, not only of NATO, but also of the European Union, is increasingly pronounced. In the post-Cold War period, NATO promoted itself as an elitist prestigious club providing unparalleled opportunities for cooperation and economic development. With this in mind, affirmative texts were often published to confirm the correlation between membership and economic prosperity. In the state of relative peace and general euphoria that prevailed in the world after the end of the Cold War, illustrated through Fukuyama’s “End of History,” the attraction of membership led to NATO’s expansion to the Eastern Bloc countries, but modern day changed circumstances revealed its true face. Namely, on the eve of the recent NATO summit in Washington, reaching the target of 2% of GDP for defense by 23 members was presented as a great success, unlike ten years ago during the summit in Wales in 2014, when only three members (the US, Greece and the UK) met this criterion. However, although 2% was considered the ultimate goal, there are increasingly those that treat the predicted allocations only as the basis, and not the maximum. It is important to note that in the current time, five NATO members allocate more than 2%: Poland 4.12%, Estonia 3.43%, USA 3.38%, Latvia 3.15% and Greece 3.08%. Although a formal consensus on increasing defence spending has not yet been reached, NATO members are still imposing new requirements for improving military capabilities, which in turn leads to significantly increased defence spending. Despite the fact that member states independently plan the development of their defence capacities, the goals are, however, primarily conditioned by the priorities of the Alliance. In this sense, an appropriate example is Estonia, which in the post-Cold War period was recognized as a progressive economy among the states of the former Socialist bloc and which was precisely for this reason called the “Baltic Tiger”. Rapid progress and acceptance of values was crowned with EU and NATO membership in 2004. However, in early September of the current year statements by Estonian officials about defence funding difficulties attracted media attention. Although it already allocates almost 3.5% of GDP to defence, significantly more than most member states, in order to fully achieve the new goals allocated by NATO, Estonia will be forced to increase defence spending to as much as 5% of GDP to reach the full capability of its own military forces. The Estonian economy, which stands out in the Eurozone due to its high levels of inflation, has suffered the consequences of increased defence spending. Facing new obligations puts into question the stability of the functioning of the state. As a consequence of the unavoidable need for funds, the introduction of defence tax, the abolition of many social benefits, the introduction of tuition fees for previously free education, among other measures, are already being considered.

    At the same time, the ambitions of the European Union regarding the development of its own military capabilities are increasingly obvious. Given that EU members are also members of NATO, this particular circumstance is a limiting factor in the autonomous operation of European military forces. Namely, Article 8 of the treaty specifies the actions of NATO members in terms of forms of association and action. In a particular case, the EU military forces are obliged to carry out activities that are not contrary to NATO, i.e. they can only be engaged as its assistance. Although the European forces are deployed as an extension of NATO, the allocations for this purpose are nevertheless separate, putting further strain on the already faltering European economies and their taxpayers. Unlike NATO, the European Union has no agreed obligations in the form of percentage amounts from GDP. However, according to the European Defence Agency data from 2022. the EU has collectively invested 1.5% of its total GDP in defence. The formal adoption of a strategic document called the “Strategic compass” for security and defence, which passed the approval procedure only a few weeks after the start of the military conflict in Ukraine, indicates that EU spending in the defence domain will increase. EU action plan by 2030 is an integral part of the document, which as such is also complementary to the strategic concept of NATO, precisely because of the stressed commitment to harmonized action and primarily refers to the beginning of the implementation of the undertaken commitments on financial allocations for military purposes.

    Current commitments in the development of new military capabilities of both NATO and the European Union are fundamentally changing the environment of the previously proclaimed concept of membership and the obligations arising from it. The fact that global development of events has complicated the status of countries, which are transforming their economies from social and development ones into war ones, can serve as a lesson for the Republic of Srpska. In the epoch of the transformation of the international order, the promoted privileged status of NATO member states and the benefits arising from it are gradually being brought into question, while the declarative right to choose is accompanied by increasing financial allocations on the way to an uncertain future.