Wednesday, July 11, 2018

Trump Contrasts Weak German NATO Spending w/ Trade Surplus and Dependence on Russian Energy

Why is U.S.  paying to defend a wealthy Germany that does not meet it's own agreed targets for NATO spending and gives billions to Russia?

In 2017 Germany posted it's highest budget surplus since reunification.  In the same year their trade surplus with the United States neared $64 billion. And while Germany has increased defense spending in accord with the 2014 NATO agreement, they remain far below the required 2% GDP target and appear willing only to reach 1.5% within the agreed 2024 time frame.

Why the focus on Germany?  Other NATO nations are also in arrears. But Germany's huge economy means that billions every year are not contributed to defense.  Many smaller countries exceed or fail to meet the same requirement but their relative contribution is minor.

Here's the chart. Note some progress since 2014:

Trump: "These countries have to step it up -- not over a 10 year period, they have to step it up immediately!"

In a Breakfast meeting with the NATO Secretary General Jens Stoltenberg, Trump was informed that his leadership on this issue meant that "last year was the biggest increase in defense spending across Europe and Canada in that generation." Not good enough!

Here's an excerpt of what Trump said at the breakfast:
PRESIDENT TRUMP: Just look at the chart. Take a look at the chart. It’s public. And many countries are not paying what they should. And, frankly, many countries owe us a tremendous amount of money for many years back, where they’re delinquent, as far as I’m concerned, because the United States has had to pay for them. So if you go back 10 or 20 years, you’ll just add it all up. It’s massive amounts of money is owed. The United States has paid and stepped up like nobody. This has gone on for decades, by the way. This has gone on for many Presidents. But no other President brought it up like I bring it up. So something has to be done, and the Secretary General has been working on it very hard.

This year, since our last meeting, commitments have been made for over $40 billion more money spent by other countries. So that’s a step, but it’s a very small step. It sounds like a lot of money, and it is. But it’s a very small amount of money relative to what they owe and to what they should be paying. And it’s an unfair burden on the United States.
Well, I have to say, I think it’s very sad when Germany makes a massive oil and gas deal with Russia, where you’re supposed to be guarding against Russia, and Germany goes out and pays billions and billions of dollars a year to Russia. So we’re protecting Germany. We’re protecting France. We’re protecting all of these countries. And then numerous of the countries go out and make a pipeline deal with Russia, where they’re paying billions of dollars into the coffers of Russia.
It should have never been allowed to have happened. But Germany is totally controlled by Russia, because they will be getting from 60 to 70 percent of their energy from Russia and a new pipeline. And you tell me if that’s appropriate, because I think it’s not, and I think it’s a very bad thing for NATO and I don’t think it should have happened. And I think we have to talk to Germany about it.

On top of that, Germany is just paying a little bit over 1 percent, whereas the United States, in actual numbers, is paying 4.2 percent of a much larger GDP. So I think that’s inappropriate also. You know, we’re protecting Germany, we’re protecting France. We’re protecting everybody. And yet we’re paying a lot of money to protect.

Now, this has been going on for decades. This has been brought up by other presidents. But other presidents never did anything about it because I don’t think they understood it or they just didn’t want to get involved.

But I have to bring it up, because I think it’s very unfair to our country. It’s very unfair to our taxpayer. And I think that these countries have to step it up not over a 10-year period; they have to step it up immediately. Germany is a rich country. They talk about they’re going to increase it a tiny bit by 2030. Well, they could increase it immediately tomorrow and have no problem. I don’t think it’s fair to the United States.
So we have to talk about the billions and billions of dollars that’s being paid to the country that we’re supposed to be protecting you against. You know, everybody is talking about it all over the world. They’ll say, well, wait a minute, we’re supposed to be protecting you from Russia, but why are you paying billions of dollars to Russia for energy? Why are countries in NATO, namely Germany, having a large percentage of their energy needs paid to Russia and taken care of by Russia?
I think trade is wonderful. I think energy is a whole different story. I think energy is a much different story than normal trade. And you have a country like Poland that won’t accept the gas. You take a look at some of the countries — they won’t accept it, because they don’t want to be captive to Russia. But Germany, as far as I’m concerned, is captive to Russia, because it’s getting so much of its energy from Russia. So we’re supposed to protect Germany, but they’re getting their energy from Russia. Explain that. And it can’t be explained — you know that.
Later, Trump and Merkel played nice while the media keeps trying to spin conflict. Either way, Merkel got the message.   No more Mr. Nice Guy, Trump is determined to take on trade and weak NATO spending.  His efforts have already yielded results but it's not enough!

UPDATE: Trump gets results!  NATO members agree to increase spending.

Statement by NATO Secretary General Jens Stoltenberg at the close of the meeting in Brussels:
STOLTENBERG: I told you earlier this week that I expected frank discussions on burden-sharing.
And that’s exactly what we had.

That is what we do among friends and Allies.

All Allies have heard President Trump’s message loud and clear.
We understand that this American president is very serious about defence spending.
And this is having a clear impact.

After years of decline, when Allies were cutting billions,
now they are adding billions.
Before, the trend was down.
Now, the trend is up.
In fact, since President Trump took office, European Allies and Canada have added an additional 41 billion dollars to their defence spending.

And all Allies have committed to raise this number substantially.
So we are stepping up as never before.

Allowing US spending to go down.

There is a new sense of urgency due to President Trump’s strong leadership on defence spending.

Today, all Allies agreed to redouble their efforts.
And this will make NATO stronger.

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