NATO defense expenditures in 1949-2017

The article presents the development of the issue of expenditure on the defense of NATO countries. The amount of these expenditures of NATO countries compared to GDP, absolute values and their share in public spending were analyzed. In the years 1949-1992, all NATO countries (except Luxembourg) had defense spending above 2% of GDP. Changes in the international situation at the end of the 20th century in Europe caused a decrease in defense spending below 2% of GDP in the period between 1993 and 2017. Despite the decisions taken in 2006 and 2014, only 5 countries now fulfil this condition. US expenditures in the studied period accounted for 65.5% of the NATO budget.


The level of expenditure of NATO countries in 1949-1981
Financial resources were necessary to achieve the goals set, as they would allow to maintain a certain level of defense (having a permanent army) of NATO member states. In the initial period, NATO consisted of 12 countries, but in 1952 Turkey and Greece (the first enlargement) were added, while in 1955 -Germany joined the Alliance (the second extension) and it consisted of 15 countries. As part of their commitments, NATO countries granted a certain level of financial security -data are included in Tables 1., 2. and 3. (in% of GDP), while in absolute terms (in billion) -in Tables 4., 5. and 6. As we can see from the data in Table 1. the highest rate of defense spending was reported by the USA (from 13,28% to 7,42%) and the United Kingdom (from 9,80% to 4,65%). The increasing trend of this indicator in the years 1949-1959 should be noted, while in the following decades there was the falling trend of defense expenditures of the NATO alliance in the period 1960-1982 -from 7,73% to 5,59. The declining trend of NATO defense spending continued between 1971 and 1981 and stabilized at 4% of GDP. Similar trends were also observed in the world, but the level of NATO alliance spending was higher. France . . 5,54% 7,13 8,60 9,01 7,29 6,41 7,69 7,33 6,77 6,71 5.
Italy -no data; 2 Iceland does not maintain a permanent army, which is why there is no defense spending. Expenditure on the defense of the Soviet Union and the bloc of socialist countries due to concealing data until 1990 are still unavailable. Therefore, for this reason, data on defense spending in the world are incomplete [7]. Iceland 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 6.

Declining defense spending of NATO countries 1982-1992
In the period 1982-1992, Spain was included in NATO (third enlargement), and the alliance consisted of 16 countries. During this period, the amount of defense expenditures as a share of the country's GDP continued to show a downward trend -the figure for NATO fell from 4,79% to 3,40% in 1992. The USA had the highest rate -from 6,39% up to 4,67% in that period. Despite the decline in defence expenditures as a share of GDP, the absolute value of them (Table 9.) in this period increased from $ 320,4 billion in 1982 to $ 512,14 billion in 1992. The US share in this period had an average level of 64,6% of the total and had an upward trend in 1982-1985 to 72,0% followed by a downward trend -to 58,3% in 1991.
Italy 9,09 9,48 9,35 9,31 13,46 17, 65  The share of defense spending in the public spending of NATO countries in the years 1982-1992 also showed a downtrend. The United States had the highest share -28,44% of the budget in 1982 which decreased to 19,89% in 1991. Turkey had similar share in the budget, as well as Greece in the initial period. The United Kingdom also had a two-digit level of the rate throughout the studied period. Other NATO countries had much lower shares, but all the countries of the alliance experienced a clear downward trend in the decade under research. It was caused by fading of the military power of the Soviet Union day by day (in fact the lost war in Afghanistan) and the bloc of the socialist countries (the Warsaw Pact). In Central and Eastern Europe the pace of democratization processes accelerated and the disintegration of the Eastern bloc was visible. These events changed the international situation and reduced bipolar tensions. As a result the threat of large-scale armed conflict was reduced [14]. Belgium Iceland 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 6. Italy

Expenditure on defense of NATO countries in 2004-2017
In In the last decade of the twentieth century there was a breakdown of the socialist bloc (and the Warsaw Pact) and the dissolution of the Soviet Union. The tension decreased and the international situation improved. That is why NATO countries began to limit defense spending by directing funds for economic development and social goals in that period.
Such a reduction in defense spending caused concern -especially in the US. At the meeting of NATO Defense Ministers on 8 June 2006 in Brussels decisions were made to increase the financing of defense spending. During the meeting of the Defense Planning Committee, ministers approved new NATO ministerial guidelines that defined the new level of the Alliance's ambitions and developed guidelines for defense planning. The document stated that allies spending less than 2% of GDP on defense must stop the downward trend and seek to increase it. The parties also committed to the point that at least 20% of the defense budget would be spent on the modernization of military equipment and weapons [19]. According to some authors, the amount of 2% of GDP allocated to the defense budget is an even balance between the defense and development needs of individual countries [20].
However, the implementation of those decisions was prevented by the financial crisis of 2008-2010. It was only after the annexation of the Crimea by the Russian Federation and the fighting in eastern Ukraine that decisions were made to reach the level of defense funding of 2% of GDP in all member states over the next decade at the NATO summit in Wales on 5 September 2014 [21].
Defense expenditures at 2% of GDP (Table 14   Such a tendency of the share of defense spending within GDP had a direct impact on the level of expenditure of NATO countries (Table 15.). In the period 2004-2011 there was an increase in defense spending from USD 727,1 billion in 2004 to USD 1,042 billion in 2011, followed by a fall to USD 900,6 billion in 2017. US share in NATO defense expenditure in years 2004-2017 had an average value of 67,73% of the total and in that period it had an increasing tendency -from 63,98% at the beginning of the studied period to 68,66% in 2012 and remained at a similar level until the end of this period. As far as the decisions taken in 2006 (Brussels) and 2014 (Newport) are concerned, it can be concluded that the effectiveness of implementation of the decisions taken was poor.   The share of defense spending within public expenditure among NATO countries (Table 16.) varied considerably -from 1,72% for Luxembourg in 2004 to 18,61% for the USA in the same year (more than a 10-fold difference). Such a disproportion for these two countries according to this indicator was maintained throughout the period 2004-2017. Virtually all countries recorded declines in the share of defense spending in public spending by countries. The exception is Canada, which maintained this ratio at a similar level (6% -7%) and Lithuania, whose rate initially decreased from 13% to 6,9% in 2011, and increased in 2016 to 15,65%. If we assume that public revenues constitute from 30% to 50% of GDP