00:00So, why is Europe rushing to arm itself?
00:03Let's look at its budgets, specifically its defense budgets.
00:08We'll start with 2014, the year the conflict between Ukraine and Russia first broke out.
00:14EU states should have spent $314 billion on defense.
00:18That's if they followed NATO's guidelines.
00:21This is what they actually spent, $195 billion, less than two-thirds of that target.
00:28Now, Donald Trump called for more defense spending in his first term as US president.
00:33It seems that had an impact, but there was still a gap.
00:36By 2022, NATO guidelines called for nearly $362 billion.
00:42EU members spent $272 billion.
00:47Much of that spending, directly or indirectly, has gone towards support for Ukraine.
00:51And that's one of the reasons that line is starting to spike.
00:56EU countries spent nearly $350 billion on defense last year.
01:01The target was roughly $370 billion.
01:05Again, that's if they followed NATO's advice.
01:08So, what does all that mean?
01:10Well, EU states spent 1.9% of GDP, just short of NATO's 2% target.
01:17So, we've seen progress, but it's uneven.
01:20Poland spent over 4% of its GDP on defense last year.
01:24That's a bigger proportion than anyone else in the alliance.
01:27Germany is Europe's largest economy.
01:29It spent 2.1%.
01:32So, just above that target set by NATO.
01:34And then you have Spain with just under 1.3%.
01:39So, what's going on here?
01:41Well, this could be a factor.
01:43Poland shares a border with Ukraine, while Spain is 4,000 kilometers from the front line.
01:51Different countries approach the issue in different ways.
01:53And that's the challenge facing European states.
01:56In the past, they could count on the US to fill any gaps.
01:59But Trump says he's no longer willing to underwrite those shortfalls.
02:02The bottom line, Europe will have to reassess its priorities when it comes to spending.
Comments