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NATO’s Direct Funding Arrangements: Who Decides And Who Pays? – Analysis


NATO’s Direct Funding Arrangements: Who Decides And Who Pays? – Analysis

NATO headquarters. Photo Credit: NATO

By Dr Ian Davis

Former United States President and leading 2024 Republican presidential candidate Donald J. Trump made headlines earlier this year by;claiming;to have told the leader of a North Atlantic Treaty Organization (NATO) member state that the USA would not come to its defence against a Russian attack if the state had not met its NATO military spending targets. This was not a complete surprise, however, since Trump had;said similar things;in 2020, and the complaint that the USA protects its European allies at the US taxpayers’ expense has been a;frequent refrain;of most recent US presidents.

Yet pressure to boost European military spending has not only come from across the Atlantic. Since the invasion of Ukraine, many European leaders have;called;for spending increases. In February, for example, European Commission President Ursula von der Leyen;urged;European countries to bolster their arms industries: facing a world ‘that has got rougher’, ‘we have to spend more, we have to spend better, and we have to spend European’.;

To inform public discussion, this topical backgrounder aims to shed more light on how NATO and its activities are directly funded. Debates on how to share the burden of paying for the military capabilities to maintain and strengthen NATO’s;deterrence and defence;posture;nearly always focus on what individual member states spend on their own militaries. However, there are at least three major categories of shared;direct costs: (a) the NATO common budgets, which are used to run the organization and for implementing certain policies and activities; (b) joint funding of specific programmes and initiatives by groups of NATO members; and (c) costs associated with NATO-led operations and missions. Although NATO treats the latter as indirect costs, they are discussed here alongside common and joint funding, since they are established within an agreed NATO framework, which includes operational command and political oversight. Moreover, some of the costs for missions and operations are eligible for common funding.

This backgrounder looks at the principles and sharing mechanisms for these direct funding arrangements,;with a focus on transparency and accountability.;

The NATO common budgets

NATO requirements that serve the interests of all 32 members, such as NATO-wide air defence or command and control systems, are funded through direct contributions by the member states. The headline budgets;announced;for these common funding arrangements in 2024 total just under;€3.8 billion (US$4.1 billion), equivalent to around 0.3 per cent of the;$1341 billion;that NATO member spent on their own militaries in 2023.;The costs of the common budgets are borne collectively by the member states according to an agreed;cost-share formula, based on gross national income;and several other factors.;

In 2019, a;new cost-share formula;was agreed for the period 2021–24, resulting in an increase in the shares from most European allies and Canada and a decrease in the US share. This commitment reflected US pressure for fairer ‘burden-sharing’ and was a particular;pacifier;for President Trump,;who had;hosted a lunch;at the 2019 NATO leaders’ meeting, but only for the so-called 2 percenters: the nine NATO member states that at that time were meeting NATO’s military spending target of 2 per cent of GDP.;Under the new arrangements, the US contribution has been reduced from around 22 per cent to around 16 per cent of the total—the same share as Germany.;

Common funding arrangements are used to finance NATO’s three principal budgets: the civil budget (running costs of NATO Headquarters), the military budget (costs of the NATO command structure) and the NATO Security Investment Programme (military capabilities). Since 2015, the NATO website and the;NATO Secretary General’s Annual Report;have provided headline figures for each of these (see box 1).;

At the NATO Madrid Summit in 2022,;members;agreed;to increase common funding in response to rising global competition and threats to Euro-Atlantic security caused by the Russia–Ukraine war. For example, the NATO Security Investment Programme;partly funded;a new $285 million;storage and maintenance facility in Powidz, Poland, which allows the pre-positioning of munitions and equipment on NATO’s eastern flank.

The three NATO common budgets

These descriptions of the three common budgets are based on information from the;NATO website.

Civil budget:;Provides funds for expenses, operating costs, and capital and programme expenditure of the international staff at NATO Headquarters. It is approved by the North Atlantic Council, NATO’s highest decision-making authority, and is financed from national foreign ministry budgets (in most countries). The;civil budget for 2024 is;€438.1 million;(around US$473 million; an increase of;18.2 per cent from 2023).

Military budget:;Covers the operating and maintenance costs of the NATO command structure, which includes the;International Military Staff, the;NATO Airborne Early Warning and Control Force, and alliance operations and missions. These are financed with contributions from national defence budgets (in most countries). In all cases, the provision of military staff remains a nationally funded responsibility. The military budget for 2024 is;€2.03 billion (around;$2.2 billion; an increase of 12 per cent from 2023).;

NATO Security Investment Programme:;Covers major construction and command and control system investments that are beyond the national defence requirements of individual NATO members. It provides installations and facilities, such as air defence communication and information systems; military headquarters for the integrated structure and for deployed operations; and critical airfield, fuel systems and harbour facilities needed in support of deployed forces. The programme is financed through members’ national;defence budgets. Projects are implemented either by individual host countries or by NATO agencies and strategic commands according to their area of expertise.;The 2024 ceiling for the programme is €1.3 billion;(around $1.4 billion; a 30 per cent increase from 2023).

Jointly funded programmes and initiatives

Jointly funded programmes and initiatives range from the development and production of fighter aircraft and helicopters to the provision of logistical support or air-defence communication and information systems to the alliance, to venture capital funds. While such programmes are funded directly by the member states who choose to participate, often they lead to the creation of a management organization or agency within NATO, such as the NATO Airborne Early Warning and Control Programme Management Agency (NAPMA), the NATO Helicopter Management Agency (NAHEMA), or the NATO Eurofighter and Tornado Management Agency (NETMA). These separate NATO reporting entities are audited by the;International Board of Auditors for NATO;(IBAN). However, while NATO publishes headline budgets for common funding, it makes no comparable information available on jointly funded programmes—at least not in a format that allows the overall spending picture to emerge.;

The degree of financial transparency varies between these programmes and is often limited to occasional spending announcements. In January this year, for example, NATO’s Support and Procurement Agency;announced;that a coalition of four NATO members would procure 1000 Patriot missiles from a German–US joint venture under a $5.5 billion contract.;

Two of the most recent joint funding initiatives are the Defence Innovation Accelerator for the North Atlantic (DIANA), which aims to foster transatlantic cooperation on critical technologies, and the;NATO Innovation Fund, a €1 billion ($1.08 billion) venture capital fund to develop critical dual-use;emerging and disruptive technologies, such as artificial intelligence, autonomous systems and quantum technologies. Both of these initiatives are aimed at harnessing civilian technologies for military purposes.

In;November 2023, DIANA;announced;the first 44 companies selected to tackle NATO’s specific challenges on energy resilience, undersea sensing and surveillance, and secure information sharing. The 44 companies were chosen from over 1300 applicants after an evaluation process. More recently, DIANA;announced;a major expansion of its transatlantic network of accelerator sites and test centres. These were nominated by the host member states to be part of the DIANA network, which will now comprise 23 accelerator sites (up from 11) and 182 test centres (up from 90) in 28 member states.

Potentially dwarfing all the existing joint funding initiatives, however, is the recent;proposal;by NATO Secretary General Jens Stoltenberg for an unprecedented five-year, €100 billion ($108 billion) package of military aid to Ukraine. Designed to address the;uncertainty over US military aid, the initiative would shift more responsibility to NATO for coordinating military support for Ukraine. Yet it is unclear how the plan would be financed or even whether it can gain the required consensus, with Hungary already;voicingopposition. Currently, most NATO member states provide weapons to Ukraine on a bilateral basis (coordinated through the ad hoc, US-led;Ramstein process), while NATO has been sending only non-lethal aid out of fears that a more direct role could lead to an escalation with Russia. Non-lethal NATO assistance is provided through a 2016;Comprehensive Assistance Package;for Ukraine, the scope of which has been enhanced and broadened since Russia’s full-scale invasion in 2022. Member states and partner countries fund this assistance through voluntary contributions to an associated NATO trust fund.;

Participation in NATO-led operations and missions;

When the North Atlantic Council (NAC) unanimously agrees that NATO should mount an;operation or mission, there is no obligation for member states to contribute (even when it is an;Article 5 collective defence operation); they commit troops, equipment or other services on a voluntary basis. Contributions differ widely in form and scale, and besides troops they can also include any kind of military equipment (such as armoured vehicles, helicopters and naval vessels) or support services (such as medical services). These contributions are taken from the member’s national miliary capabilities to form a combined NATO capability. Member states cover the costs associated with their own deployments.;

NATO’s;current operations and missions;include the;NATO Response Force;(which was;activated;for a military mission for the first time in February 2022), a peacekeeping force in Kosovo (KFOR), three;maritime security;operations (the;Standing Naval Forces,;Operation Sea Guardian;and;Aegean Activity), an advisory and capacity-building mission in;Iraq;(which was expanded in February 2021 following a request by the Iraqi government), cooperation with the;African Union, and;air policing;(a peacetime mission that aims to preserve the security of the airspace of NATO members). The costs of the KFOR deployment, for example, will fall on the;28 troop-contributing countries;that make up the total force strength of around 4600 troops. Establishing the running costs for these ongoing missions is difficult, however, since NATO rarely publishes headline figures and the costs are spread among the contributing countries.

The costs associated with NATO’s largest ever operation—the nearly 20-year;deployment to Afghanistan(2001–21) under a UN Security Council mandate—were even less clear cut than those of NATO’s current operations and significantly larger than the common budgets and joint funding arrangements. Assessing the total costs for participating nations in Afghanistan is a complex exercise, not least because of different views on what should be included.;According to the US Department of Defense, total US military expenditure in Afghanistan (October 2001–December 2020) was $825 billion, with another approximately $130 billion spent on reconstruction projects. A;study by Brown University, however, suggested that the total US spend was around $2.3 trillion, including interest on debt used to finance the war and other expenses such as veterans’ care and spending in neighbouring Pakistan. Similar uncertainty surrounds spending by other contributors to NATO’s Afghanistan mission: estimates of the United Kingdom’s spending, for example, range from;£22.2 billion;($28.2 billion, at 2024 exchange rates) to;over £40 billion;($40 billion).

Transparency and accountability

The complexity of the NATO funding arrangements further complicates transparency and accountability, which are crucial to understanding who pays what and why. At the NATO Wales Summit in 2014, following;criticism;in particular from the official auditing body of the Dutch government, NATO was instructed to improve its financial transparency and accountability and to report back on progress at the next summit.;

Since 2015 the headline budget figures have been available for the common funding budgets and the independent IBAN, which was created in 1953, now regularly publishes financial and performance audits. Another small but tangible change is that for the first time;NATO’s Resource Policy and Planning Board—a subsidiary body of the NAC—publicly released a five-page;executive summary;of its 2015 Annual Report and did so again for the;2017 Annual Report;(but has not done so since). The annual reports assess the performance of military common funding within NATO and review the financial situation of the NATO Security Investment Programme and the civil and military budgets.;

However, there has been little if any public reporting back on financial transparency at subsequent NATO summits. The;communiqué;released after the 2016 Warsaw Summit effectively restated the commitment made in Wales, but no progress reports on financial transparency and accountability have been presented at the six summits since then.

Transparency of the funding arrangements for operations and missions—and the growing number of ad hoc, jointly funded projects by ‘coalitions of the willing’—is also weak. With many of these projects, the participating countries identify the requirements, priorities and funding arrangements and NATO provides political and financial oversight. Some projects can also take the form of contributions in kind or trust fund arrangements. However, the oversight of many of these arrangements seems to fall in the grey area between national sovereignty and intergovernmentalism. Since these types of projects are only likely to increase in the coming years, greater transparency and oversight mechanisms for them are needed within member states.;

One of the risks of weak oversight of such programmes is the potential for ‘unwarranted influence’ by the military–industrial complex. More than six decades after US President Dwight D. Eisenhower’s;well-known warning;in his 1961 farewell address, the military–industrial complex’s influence over policy is, according to some,;stronger than ever;in the USA, with potentially significant knock-on effects throughout NATO.;

The military–industrial complex certainly played an influential role in the development of NATO’s European land-based ballistic missile defence system, which includes radars and ships across Europe. A key decision to develop a capability to protect NATO’s forces from ballistic missile threats was taken at the;NATO Riga Summit;in November 2006. This decision was based on a four-year, 10;000-page;feasibility study;funded by NATO (i.e. by Canadian, European and US taxpayers) on the missile threat to Europe and how to defend against it, completed in May 2006. The classified study was carried out by an international consortium of industries led by the US firm Science Applications International Corporation (SAIC), which then successfully bid for a NATO missile-defence;contract;worth €75 million ($94 million at 2006 exchange rates). The contract with SAIC was agreed behind closed doors at the Riga Summit, with no prior independent scrutiny of the feasibility study or parliamentary debates in the then 26 NATO member states.;

At the NATO Lisbon Summit in 2010, it was;agreed;that NATO’s Active Layered Theatre Ballistic Missile Defence programme should be expanded to cover not just deployed NATO forces but to ‘also protect NATO European populations, territory and forces’. Implementation of that programme;continues today, requiring a mix of commonly funded assets and voluntary contributions provided by several NATO member states, including Germany, Romania, Spain, Turkey and the USA. None of the NATO-funded feasibility studies and missile proliferation threat assessments over the past 15 or so years used to justify deployment of territorial missile defences has been declassified and made available to the public.;

The right of access to information is a key principle in democracies. While intergovernmental organizations have been slow to adopt relevant measures compared to states, the European Union (EU) has had clearly defined rules on public;access to documents;since 2007 and the;World Bank;introduced a disclosure policy in 2010. NATO is one of the few major intergovernmental organizations not to have done so. Neither does NATO publish an annual budget or financial report, as is routinely done by the EU and the World Bank.;

Transparency weaknesses in NATO include a lack of basic information on the organization, making it hard to know even who is involved in policy development; a lack of information about what the intergovernmental working groups are doing as they develop the policy commitments leaders will endorse at summits; and weak measurement of member states’ progress in fulfilling their policy commitments. Even when the NATO policy development process agrees a course of action, the default position remains to withhold information—largely as a result of NATO’s long-standing secrecy and classification rules.


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South Caucasus News

Better Policing In South Africa Is Well Within Reach – Analysis


Better Policing In South Africa Is Well Within Reach – Analysis

File photo of members of South Africa police. Photo Credit: HelenOnline, Wikipedia Commons

By Gareth Newham 

Imagine a South Africa where policing worked and people were safe. Imagine that by the country’s next national polls in 2029, voters knew that the 2024 election had delivered a president and police minister who took;reform;seriously.

‘Safety for all starts with a motivated police service trusted by the public and equipped to make sure violent criminals face trial,’ they would have said, as they took up their new posts.

For one, crime would be less of a campaign issue in 2029 than it was in 2024. The murder rate would have dropped. Organised crime was on the back foot, with more kingpins in the National Prosecuting Authority’s crosshairs.

Guns were starting to fall silent. There were fewer robberies and less taxi violence. People noticed less drug dealers and addicts on the streets. International investment in the country was rising as safety ratings improved. Shops stayed open longer, and less money was spent on extortion or private security. Young people felt hopeful.

Policing all 62 million people is impossible – SAPS should target the 30 000 offenders who make us feel least safe

A clear, practical programme to improve the South African Police Service’s (SAPS) professionalism, performance and integrity was bearing fruit. The new leaders revitalised police management systems so that only the best candidates were in positions of authority. There was a clear line of sight from head office to police stations nationwide. Local safety challenges were quickly recognised and resolved.

A rigorous independent assessment had pinpointed policing priorities. The intelligence and investigative units were properly resourced and worked together well. Repeat violent offenders and those leading criminal networks found themselves before the courts.

Visible policing and high-density operations were carefully planned to tackle specific crimes. An Evidence-Based Policing Centre was set up to document lessons and apply them countrywide, guide police leaders’ decisions and regularly update training and station-level instructions.

Recognising that it was impossible to police all of the country’s 62 million people, leaders decided to go after the 30 000 who made civilians the least safe. Working with a revamped intelligence division, each station commander identified the top 20 accused in their precincts who caused the most harm, and brought them to book.

Dedicated forensics and anti-firearm units could trace and remove guns and ammunition used in crime

As the SAPS started using resources better, they closed in on those responsible for most of the 27 494 murders recorded in 2024 and thereafter. These offenders also typically committed other crimes, so ending their impunity dramatically improved safety. Police stopped wasting resources on arresting tens of thousands of poor people in the streets for petty crimes.

The new police minister understood that the SAPS was too large and complex to change overnight. It needed a carefully considered approach developed by skilled police working with experienced outsiders. The minister stuck to her commitment that the SAPS would be assessed against the best police and crime prevention practices internationally.

Rigorous analysis of firearm crimes allowed the police to remove illegal guns from the streets. The Central Firearm Registry was fully digitised and capacitated, and;the loss of police firearms dropped from 740 in 2023 to under 20. Dedicated forensics capacity helped anti-firearm units trace and remove guns and ammunition used in crime. Those involved in dealing or possession of illegal firearms were jailed. Management of firearm stocks by private security companies and legal firearm owners improved.

The police minister saw that a few practical changes made a big difference in the SAPS’ ability to reduce murder, with the rate of solved murder dockets increasing dramatically from the paltry 12% in 2024.

Recruitment practices were overhauled so only the best were selected as SAPS trainees. Entry-level recruitment was fully digitised to prevent bribery and ensure applicants had a minimum level of skill. Those selected were good communicators, problem solvers and team players. They brought fresh thinking, skills and pride to their work. Joining the police was no longer a last-hope chance at a job.

Entry-level recruitment should be fully digitised to prevent bribery and ensure applicants have minimum skills 

The new administration realised that the high levels of police corruption and misconduct led to low levels of public trust in the police and government as a whole. These problems were also costly and wasteful – with hundreds of millions paid out in civil claims to victims of unlawful police behaviour.

The SAPS Integrity Management Component was given the resources and authority to undertake regular random tests on police officials suspected of wrongdoing. Those who did their jobs honestly and to standard were empowered and eligible for promotion. Those who brought the SAPS into disrepute were removed. Dedicated internal investigation units ensured that officers failing to meet the codes of conduct and ethics standards were dismissed.

The SAPS was on the road to becoming an organisation the public trusted. This was an improvement from 2021, when 73% of people surveyed by the Human Sciences Research Council said they had no or little trust in the police. Or the Transparency International survey finding that almost one in five people thought all police were corrupt, and 30% said they thought most police were corrupt.

Instead of fearing the police, communities appreciated them.;People reported crime and gave information to the police on those they knew were involved;in wrongdoing. Women no longer worried;as much;about being harassed by policemen, and more parents told their children to find the nearest officer for help if they were lost or in trouble.

All of this is possible – it need not be imaginary. South Africa has the skills, expertise and resources to make it happen. Will our new political leaders and government seize the opportunity?


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When A 20th-Century US President Prosecuted His Political Opponent – OpEd


When A 20th-Century US President Prosecuted His Political Opponent – OpEd

Eugene V. Debs speaking in Canton, Ohio, in 1918, being arrested for sedition shortly thereafter. Photo Credit: Wikipedia Commons

By Jon Miltimore

In June 1918, near the end of;World War I,;the Socialist Party of America’s presidential candidate, Eugene Debs, delivered;a scathing antiwar speech;to a crowd in Canton,;Ohio.

Debs knew that he had to be careful in how he phrased his remarks, noting ironically that “it is extremely dangerous to exercise the constitutional right of;free speech;in a country fighting to make democracy safe in the world,” a reference to the;Espionage Act;that had been signed by President Woodrow Wilson the previous year, which made it a crime to criticize the draft.

Though Debs called the idea that America was fighting to make the world safe for democracy “rot” and “humbug,” the word;draft;appeared nowhere in the speech.

Nevertheless, Debs was arrested and charged with 10 counts of sedition. He was eventually found guilty of incitement and obstruction, and he was sentenced to 10 years in prison. (Wilson;had a knack;for imprisoning his political opponents.)

The conviction of Debs, whose sentence was later commuted by President Warren Harding, received attention in 2016 after then-presidential candidate Donald Trump threatened to put political opponent Hillary Clinton “in jail” if he was elected president, citing her use of an unauthorized personal email system while she was secretary of state.

“We don’t jail our political foes here like in tin-pot, third-world banana republics or dictatorships,”;Chicago Tribune;columnist Eric Zorn;said.

Though he went on to win the election, Trump’s threats to jail Clinton, fortunately, proved idle.

“I think it would be very, very divisive for the country,” Trump;told reporters;after securing victory.

Trump’s decision not to follow through on his threat was prudent, even though the FBI;had concluded in 2016;that Clinton had been “extremely reckless” in her handling of classified materials and didn’t rule out that laws “governing the handling of classified information” may have been broken.

One of the things that has made America unique is that those in power, since the Debs conviction, have largely refrained from using the immense power of the state to target political opponents and former presidents.

At least, they had.

Last week, Trump was convicted on 34 counts in a New York courtroom, making him the first former president to be tried and convicted of crimes.

The case stemmed from “misclassified” hush money that Trump’s lawyer sent to porn star Stormy Daniels in a move that the prosecution said was designed to boost his 2016 electoral prospects.

The verdict brought;an orgy of celebration;from those who despise Trump, who point out that “nobody is above the law.”

This axiom is of course true, but it neglects important context, including the fact that just two years ago, Hillary Clinton’s presidential campaign;agreed to pay;a $113,000 fine to the Federal Election Commission for “misreporting” spending on research supporting the;Steele dossier.

The dark truth is that Trump’s conviction is part of a larger campaign by his enemies to use the legal system to destroy him. As readers likely know, Trump is also facing federal charges in South Florida; Washington, D.C.; and Fulton County, Georgia.

Elie Honig, a former prosecutor and CNN legal commentator,;noted;in a;New York;magazine article the “legal contortions” District Attorney Alvin Bragg used to convict Trump:

“The charges against Trump are obscure, and nearly entirely unprecedented. In fact, no state prosecutor … has ever charged federal election laws as a direct or predicate state crime, against anyone, for anything. None. Ever.”

While it’s true that presidents should not be “above the law,” neither should they be targeted for political purposes.

Yet Bragg openly campaigned on his ability to take down Trump,;bragging;that he had “sued Trump over 100 times.” (So did;New York Attorney General Letitia James.);

This is not truth, justice, and the American way. It’s closer to the Bolshevik idea of “justice.”;

“Show me the man, and I’ll show you the crime,” Lavrentiy Beria, the minister of internal affairs of the Soviet Union, famously said.

Many argue that Trump’s conviction will almost certainly be overturned on appeal, and they might be right. But this should not overshadow the damage Trump’s political opponents are doing to the American system.

We’re witnessing in real time a perversion of the law that, instead of being used to protect life, liberty, and property, is being used to destroy a former president, and current front-runner, months before a presidential election.

Indeed, just days before the verdict was announced, President Joe Biden’s campaign visited the courthouse in the borough of Manhattan where Trump was being prosecuted;to hold an event.

While recent headlines were all about Trump, history is likely to remember it as the day the president of the United States oversaw, for the first time, the prosecution of a former president.

  • About the author: Jonathan Miltimore is the Senior Creative Strategist of FEE.org at the Foundation for Economic Education.
  • Source: This article was published by FEE and originally appeared in The Washington Examiner.

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South Caucasus News

The dates of the V International Women’s Documentary Film Festival “Sevil”


have been announced. The long-awaited V International Women’s Documentary Film Festival “Sevil” will be held from July 5 to 12, 2024 in many cities of Azerbaijan, including Baku, Shaki, Lankaran and Shabran. For the fifth year now, the International Women’s Documentary Film Festival, commonly known as “Sevil”, continues to provide…


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Russia puts former Ukrainian Prime Minister Yulia Tymoshenko on its wanted list


AP:  Russia has put former Ukrainian Prime Minister Yulia Tymoshenko on its wanted list, Russian state media reported, citing the Interior Ministry’s database.

Russian state news agency Tass said Tymoshenko was listed as wanted on unspecified criminal charges.

She reportedly joins Ukrainian President Volodymyr Zelenskyy and his predecessor, 


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Several roads closed across Armenia – ARMENPRESS


Several roads closed across Armenia  ARMENPRESS

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Azerbaijani minister: Decline in Caspian Sea level – clear reminder of global warming consequences


The decline in the level of the Caspian Sea observed in recent decades is a clear reminder of the consequences of global warming

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Kazakhstan’s foreign minister to attend BRICS event


Deputy Prime Minister – Minister of Foreign Affairs of Kazakhstan Murat Nurtleu will take part in the ministerial session of the BRICS dialogue in Nizhny Novgorod on June 10-11, Kazakhstan Foreign Ministry’s spokesperson Aibek Smadiyarov said at a briefin

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Far right show record result in Poland’s elections to EP


According to the results of the elections to the European Parliament in Poland, the party of the current Prime Minister Donald Tusk beat the previous party in power, Law and Justice, by a slight margin, and the far-right Confederation took third place

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Arpadarai: Ecological balance of Caspian Sea very fragile


The ecological balance of the Caspian Sea is very fragile