Rethink 2%: NATO ‘Defense Spending’ Should Favor Cyber

By Cybèle Greenberg

February 21, 2019

The acting Pentagon chief’s ambivalent visit to NATO headquarters last week hardly reassured allies rattled by President Trump’s talk of quitting the alliance. But while Trump’s rhetoric is less than encouraging, his criticism of allies who put less than the agreed-upon 2 percent of national economic output toward defense should prompt us to rethink how we define “defense spending” in today’s fast-changing world. 

Of NATO 28’s member states, only five meet the goal; German defense spending is just 1.2 percent of GDP. In this way, at least, Trump has a point: NATO’s economics are clearly not working out, and this disorganization is undermining the alliance. But the crucial adjustment that is needed is not the amount of spending, but what it seeks to fund. 

The face of war is changing dramatically as cyber and electronic attacks become increasingly commonplace, and so must our allies’ understanding of defense. Over the past year, state-sponsored Russian hackers have targeted both U.S. elections and critical components of the country’s infrastructure. Chinese hackers appear to be equally—if not more—alarming. The number of data breaches at U.S. companies rose 27 percent in 2017.

Yet the most recent NATO document to outline financial expectations remains the Wales Summit Declaration of 2014, which dedicates only two paragraphs to cyber defense and focuses on conventional defense expenditures, including the “deployability and sustainability” of “land, air and maritime forces.” 

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Over the last few years, NATO’s member-states have started to acknowledge this oversight and have taken steps to jumpstart the development of cyber capabilities. The alliance has recently announced the imminent release of its first holistic cyber-operations doctrine and the construction of a new cyber command center expected to be fully staffed and operational by 2023. The United States, Britain, Denmark, Estonia, and the Netherlands have pledged to use their digital defense systems to respond to a serious cyber-attack on a fellow member-state. The alliance has launched Locked Shields and other exercises to fine-tune digital battle tactics. And in the communiqués that followed last year’s summit, “cyber” appeared more often than “terrorism.” 

Yet NATO remains woefully unprepared for digital warfare, as highlighted in a Belfer Center report published last week. One example: only a fraction of a $3 billion fund for satellite communications and computer systems—around $100 million— has been used to strengthen critical cyber-defenses. We need to be spending differently rather than simply more.

Instead of pressing fellow member-states for greater financial contributions in general, Trump should launch the development of a more precise economic strategy based on the nature, likelihood, and danger of the threats we currently face. This starts by working with our allies to revise and broaden the current understanding of what defense spending entails. An updated definition would focus on the categories that are most critical to transatlantic security given recent Russian and Chinese activities, but that are not currently included within the scope of the 2-percent target, such as the cyber-defense of electoral processes and of civilian infrastructure. 

Digital defense is cheaper and more easily deployable than its more traditional, asset-heavy counterparts. Thus, revising NATO’s current spending requirements to encourage member-states to spend even a fraction of GDP on bolstering their most vulnerable cyber-fronts would likely be more effective and achievable than current objectives. 

Most importantly for the successful implementation of such changes, recent developments have shown that NATO member-states are indeed willing to spend more on cyber-defense. Last week, the Italian defense minister Elisabetta Trenta—a member of Italy’s populist Five Star Movement and a known critic of military spending— demonstrated interest in boosting her country’s defenses in the digital arena. 

Spending money to develop cyber security defenses should count the same as spending money to buy tanks,” she argued. 

While this view may prove a bit extreme for most NATO leaders, it does suggest a path forward for productive compromise, improved security, and a healthier alliance. 


By Cybèle Greenberg // Cybèle Greenberg is a research associate at the Council on Foreign Relations. She has worked in corporate finance and holds degrees from Cambridge University and Harvard College.

February 21, 2019

https://www.defenseone.com/ideas/2019/02/rethink-2-nato-defense-spending-should-include-cyber/155051/