NATO turns 70 years old next Thursday. The intergovernmental military alliance was formed after World War II between the United States, Canada, and Western European countries, but has grown to include much of Europe. Its initial goal was to curb Soviet influence in Europe following the end of WWII.
In the present, the organization has come under fire by President Trump, who criticizes the way that the inter-military alliance is funded. President Trump has called on other member states to increase defense spending. NATO is funded by many revenue streams: indirect or national contributions, where members volunteer equipment or troops and bear the cost of that; direct contributions, where each member dedicates a small percent of their defense budget to the organization based on its Gross National Income (GNI); and through joint funding for individual projects, where participating countries can identify the needs and funding arrangements and NATO monitors the political and financial oversight of a project.
For the individual defense expenditure of each country, the United States has the highest budget. In 2018, the United States is estimated to have spent over $700 billion on defense, which makes about 3.5 percent of the country’s GDP. The United Kingdom spent the second most amount of money, with a defense budget of about $61 billion. While in nominal numbers the UK had the second highest defense budget in 2018, both Greece and Estonia’s defense budget took a higher percent of their GDP.
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