MNI: France Sees 5% NATO Spending Target As 'A Bit Optimistic'

France will resist the call by NATO Secretary General Mark Rutte to agree a boost to the alliance’s defence spending target to 5% of GDP by 2032 at its June 24-25 summit, French officials told MNI, suggesting that extending the timeline to reach a new target might be part of a compromise.

France wants to ensure that any increase in defence spending represents value for money and is not just a macroeconomic stimulus programme at a time when it needs to bring its budget deficit back under control, officials said, in comments which came after MNI reported Italy is pushing for the deadline for Rutte's 5% proposal to be pushed out to 2035. (See MNI: Italy Seeks Support For 5% Defence Target Delay-Officials)

"We are on track for a steady increase in our defence budget, but all of that money will be deployed with rigour and the intention to get bang for our buck," one French official said. 

"It's about how the money is used and ensuring that none of it is wasted. That is much more important than just saying it's a macro stimulus,” he added, calling a 5% target “a bit optimistic.”

GRADUAL RAMP UP

France has fulfilled the current NATO requirement for defence spending of around 2% of GDP for some time and already has its own plan in place to increase this gradually.

"We are determined to ramp up and we already have a plan in place to do that but just setting a madly high stimulus number won't get us anywhere."  

While Germany has indicated it is on the way to boosting combined defence and defence-related infrastructure spending to 5% of GDP, several other countries, particularly those furthest from Russia such as Spain, are opposed to such a high target.

Italian officials are also pressing for an extension of the European Commission's proposed four-year national escape clause from EU fiscal rules for defence spending. 

In contrast, the French government remains reluctant to request a national escape clause from the European Commission and EU. 

"We're not closing off options. But our focus is really on bringing down our budget deficit and the escape clause won't help us do that," the official said. 

The French Treasury's Chief Economist Dorothee Rouzet told MNI in a recent interview that France might, however, consider participation in the EU's EUR150 billion SAFE lending programme for defence, but with the objective of ensuring that the project gains momentum and leads to higher purchases of European military equipment rather than for financial reasons. (See MNI INTERVIEW: France Ready To Join SAFE Loan Facility )

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