The mother of all bad ideas: US think tank wants a NATO bank to grease the financial wheels for new weapons

Dr Ian Davis, NATO Watch

23 January 2021

A new report from the Washington-based Center for American Progress wants the incoming Biden administration to support the creation of a NATO bank in London. Wealthier NATO members would initially capitalize the bank, or help it achieve a AAA credit rating, gradually setting in motion a self-sustaining financial enterprise for underwriting new military investments.

Is this really the best that a self-styled ‘progressive’ and Democratic-leaning think tank can come up with for Biden’s national security agenda? As bad ideas go it is up there with filling the Hindenburg with hydrogen or invading Iraq in search of weapons of mass destruction.

The report suggests that a dedicated NATO bank could help stabilize defence investments throughout all member states, including dual-use, civilian transportation infrastructure projects. The fear (at least among US military contractors and their friends) is that the economic downturn of the coronavirus pandemic may jeopardise the recent surge in military spending within the alliance.

Let’s be clear about one thing. NATO and its member states are not short of money for weapons. As a result of the ‘pandemic of Pentagon spending’ the United States earmarks at least $740 billion—$2,235 for each American woman, man and child—to the Pentagon, and is more than the defence budgets of the next ten biggest-spending countries combined. And in terms of human (as opposed to national) security bang for the buck, how useful was all that military hardware in preventing COVID-19 deaths or the Capitol from being overrun by domestic extremists? Total NATO military spending reached $1.04 trillion in 2019 and includes real growth in spending by European member states and Canada for five consecutive years. By the end of 2020, they will have added a cumulative total of well over $100 billion. Enough is enough.  

If NATO is looking for a bold idea that would likely have the support of the public it could do worse than dust down Nobel Peace Prize laureate Óscar Arias’ proposal from the mid-1990s to establish a Global Demobilization Fund. He called for the nations of the world to commit themselves to at least a 3 per cent a year reduction in their military spending over five years, with the rich nations earmarking at least one-fifth of these savings towards the proposed Global Demobilization Fund. Hence, a NATO Demobilization Fund could be established, perhaps in cooperation with Russia and China, to fund a climate-focused pandemic recovery roadmap.

It is humanitarian investments that need to be stabilized, and not aid for military contractors. It is estimated, for example, that $35 billion is needed to reach 160 million people impacted by conflict, acute hunger and the devastating impact of COVID-19. with life-saving support across the globe in 2021.

When alliance leaders meet later this year following Biden’s inauguration, NATO Secretary General Jens Stoltenberg is expected to propose concrete steps for a reform agenda already underway, dubbed NATO 2030. A revaluation of military spending and a plan for coordinated reductions should be a central part of that agenda.