What is NATO and what does it cost to be a member?

Russia’s invasion of Ukraine in February 2022 marks the second conflict between the two countries in the 21st century and the largest land war in Europe since World War II.

In response to this, the North Atlantic Treaty Organization (NATO) has moved military forces into countries around Ukraine, which is not a member country, and has provided a common defense for its member countries.

What is NATO and why was it formed?

NATO is a military alliance composed of 32 member countries from North America and Europe.^[1] The organization was formed in 1949 as a collective defense organization to counter the Soviet Union during the Cold War. The United States has been a member of NATO since 1949.

Its primary purpose today is to promote security and defense cooperation among its members while also serving as a forum for consultation and coordination on political and security issues.

Which countries are in NATO and how do countries join?

Any European state may join NATO after receiving a unanimous invitation from its NATO members. Since 1949, the alliance has grown from 12 to 32 members. Both Finland and Sweden were invited to join NATO at the Madrid Summit on June 29, 2022. Finland became a member on April 4, 2023, and Sweden followed on March 7, 2024.

Which countries want to join NATO?

Three countries have declared a desire to join the alliance: Bosnia and Herzegovina, Georgia, and Ukraine. Bosnia-Herzegovina has participated in a NATO program for aspiring members since 2010.

NATO members agreed in 2008 that Georgia and Ukraine would join the alliance but did not specify when. Their admission depends on fulfilling certain criteria, including defense reforms. Both countries are currently facing Russian interference, ranging from occupation to active conflict.

How much does it cost to be in NATO?

NATO countries have two funding obligations. The first is contributions to the common fund, which is direct funding for NATO. The second is a commitment to spend 2% of a country’s Gross Domestic Product (GDP) on national defense or military spending, which is considered indirect funding.

The common fund (direct funding)

Each member contributes to a common fund based on the size of its overall economy.

NATO’s common fund budget — $3.6 billion in 2023 — supports the NATO Security Investment Program (NSIP), the Military Budget, and the Civil Budget. These sources provide funding for collective military infrastructure such as defense, readiness and interoperability, digital and cyber capabilities, and other administrative costs.

The US is projected to cover roughly 16% of NATO’s 2024 budget, or around $572 million.^[2] Although NATO benefits from US funding, the US also benefits from operating within and having access to military bases in foreign countries, as well as enabling US contractors to pitch and win NATO projects.

The 2% rule (indirect funding)

In addition to direct funding, each country is expected to spend 2% of its national GDP on its own national defense or military spending. Although this is not an explicit requirement of membership, it is viewed as a measure of a country’s commitment to NATO and common defense efforts. This 2% agreement was established at a 2014 NATO summit following Russia’s forced annexation of Crimea from Ukraine.

In FY 2023, eleven NATO members met the target of spending 2% of their GDP on defense, based on estimates. Poland spent the highest percentage on defense at 3.90%, followed by the US at 3.49%.

Historically, the US spends more on domestic defense than the rest of NATO. After adjusting for inflation, total defense spending for non-US NATO countries was $445.1 billion in 2023.

In the same year, US total domestic defense spending was $949.0 billion.

Does NATO have its own military?

The NATO Response Force is an on-call multinational force of 40,000 troops contributed by various members on a rotating basis. While the force has been used multiple times for humanitarian purposes, it was activated for deterrence and defense for the first time in February 2022 in response to Russia’s invasion of Ukraine. However, the activated troops did not directly participate in the conflict. Since Ukraine is not a NATO member, the troops were readied for military action if Russia attacked a nearby member.

As of 2023, NATO members’ combined active military forces totaled an estimated 3.3 million. The US military accounts for approximately 42% of that number. For comparison, the world’s largest active military by total enlisted forces is China, with 2 million people.

What is Article V?

Article V is a crucial provision within NATO’s founding treaty that states that an attack on one member country will be considered an attack on all member countries. It signifies the collective defense commitment among NATO members. When one member is attacked, all other NATO countries are expected to assist allies, including with military force.

NATO invoked Article V for the first and only time to join the US in the war in Afghanistan after the September 11, 2001, terrorist attack.

The US Congress still needs to approve the request to go to war even if Article V of NATO is invoked. Therefore, provisions within the NATO treaty do not supersede the power of the US Constitution.

What is the US military’s presence in Europe?

In December 2023, over 64,000 active-duty^[3] American troops were deployed in Europe. This force was 38% of all US troops stationed abroad at the time.

There are multiple US military bases in Europe, including in Germany, the United Kingdom, Italy, and Spain.

Where has NATO deployed in the past?

In the early 1990s, NATO forces helped stabilize the Balkan region after the breakup of Yugoslavia. It later protected Kosovo when Serbia invaded the country. In 2011, NATO deployed to Libya during the overthrow of Libya’s government. The alliance also supported humanitarian efforts in Pakistan in 2005, Sudan in 2006, and the US after Hurricane Katrina.

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