US will reduce its contribution to the Atlantic budget and Germany will increase it

UNITED STATES (OBSERVATORY NEWS) — The United States will cut its contribution to NATO’s operational budget, officials said Thursday, as Germany increases its payments as the alliance seeks to appease President Donald Trump ahead of next week’s summit.

Trump has repeatedly criticized European members for exploiting the United States, specifically pointing to Germany – the continent’s biggest economic powerhouse – for their reluctance to fulfill a NATO pledge to spend 2 percent of GDP on defense.

With Trump’s anger centered on European national defense budgets, US officials have also complained about the US contribution to NATO’s operational costs, and the 29-nation bloc has now agreed to make a change.

“All allies have agreed on a new cost-sharing formula,” a NATO official said. “Under the new formula, sharing quotas are increased for the majority of European allies and Canada, while the US share falls.”

“This is important evidence of the allies’ commitment to NATO and to a more equitable burden-sharing.”

Washington currently contributes 22.1 percent of the alliance’s budget – a total of $ 2.5 billion ($ 2.37 billion) in 2019 – and Germany 14.8 percent, under a formula based on gross national income.

Under the new agreement, the United States will reduce its contribution to 16.35 percent of the total budget, Germany’s contribution will rise to the same level, while other allies will pay more.

Although the amounts involved are relatively small militarily – the 29-nation alliance spent a total of $ 1 trillion on defense in 2018 – not all allies are happy with the move.

Diplomats say France has refused to approve the new arrangement and will keep its contribution at the same level of 10.5 percent, saying the deal to change the numbers was arranged between Trump and Chancellor Angela Merkel without consulting the other allies correctly.

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