N.A.T.O. chases Soviet defence spending

Press, 29 July 1978, Page 14

N.A.T.O. chases Soviet defence spending

From the “Economist,” London

Russia has been increasing its defence spending by 4 or 5 per cent a year for the past several years, but the N.A.T.O. countrys’ outlays have remained almost stagnant after allowing for inflation.

When President Carter asked N.A.T.O. last year to jack up its defence budgets by a 3 per cent a year in real terms, starting in 1979, cynics suspected that ministers would agree readily enough away from home, but that they would be made liar.’ by their parliaments. Senior N.A.T.O. officials on the whole tended to believe the promises. Who was right? Belgium had definite plans

to go for the 3 per cent, but these could be upset by the political crisis within the ruling coalition. The debate in parliament will probably take place later this month. Today’s odds: 3-1 that the 3 per cent will pass — after a lot of pressure from N.A.T.O. Britain will definitely make it. Both the present Government and the Opposition are firmlv committed to 3 per cent.

Canada’s debate will probably be held in October. The country started a major reequipment programme in 1976, based on a fairly firm commitment by the Government to push up military investment (most of it in new equipment) by 12 per cent

in real terms in each of the following five years. This does not necessarily mean a 3 per cent increase in the total defence budget, but it comes close. The Government has accepted the 3 per cent as a goal. Denmark will not make the 3 per cent target. The defence ministry got a hardfought agreement last year for a per cent increase in real terms in each of the following four years. It has no wish to reopen the haggling now for fear of losing even this, so 1| per cent it is.

France seems certain to go along with the 3 per cent, though it would probably argue it is doing this in spite of—-not because of—N.A.T.O.

it plans to increase its spending by 15 per cent next year to around 90 billion francs (about $20,000 million). Even after allowing for inflation, this certain to be more than a 3 per cent increase, and its five-year plan (up to 1982) shows a whopping real rise of 52 per cent — though Parliament has yet to give its approval to that.

Germany’s new defence minister, Mr Hans Apel, is making a determined pitch in the Cabinet for a Budget of around DM 35 billion (about $17,000 million), which would be a 3 per cent rise. The best guess is that he will win. The parliamentary debate should start in early September. Greece will probably not make it. It spent $1390 million in 1977 and will spend

$1550 million this year, roughly the same amount after inflation (but, at just over 6 per cent of G.N.P., one of the highest ratios in N.A.T.O). So far it is not telling N.A.T.O. much — to emphasise its huff over Turkey.

In Italy anything can happen, as usual. Its major reequipment programmes are partly isolated from the general budget, so these are probably safe. After holding back for years, Italy now seems likely to make a more-than-symbolic contribution to the N.A.T.O. airborne early warning aircr "t, Awacs. But the 3 per cent goal will probably not be reached. The debate is due in August. Luxemburg will probably achieve 3 per cent and the Netherland’s Government too is committed to the 3 per

cent increase and will almost certainly deliver. Norway only two months ago seemed certain to reach, and likely to exceed, the 3 per cent. But now some strong opposition has developed. The budget will be presented around midSeptember. Outlook: 3 per cent still probable. Portugal does not have a chance, and will be lucky to avoid a major cut.

Turkey’s Prime Minister has said he will cut defence spending next year. This is partly to put pressure on the United States to relax its arms embargo, but mostly a reflection of severe economic problems. No doubt about the United States. The Administration turned in a Budget with a 3 per cent increase, and Congress is busily adding it to.