Do Nato Obligations Trump European Budgetary Constraints?

The article examines from an international law and policy perspective the relation between North Atlantic Treaty Organization (NATO) obligations and European Union (EU) budgetary constraints. Its aim is to understand whether the binding target to spend 2% of annual gdp on defense that NATO members have undertaken can trump EU rules adopted in the aftermath of the euro-crisis that instead strictly limit governments’ deficits. The topic of this article has acquired particular relevance since the election of US President Trump, who has repeatedly complained about underspending on defense by European countries and threatened to disregard the NATO mutual defense pledge (that an attack on one is an attack on all) vis-à -vis those NATO members who fail to pay their fair share to the organization. By combining in an innovative way conflict-of-laws analysis with public policy research on trade-offs in budget-making, the article claims that EU rules do not legally prevent EU member states from fulfilling their NATO obligations – but make it politically difficult for them to do so. In order to address this state of affairs, the article thus considers how greater integration in the field of defense by EU member states could overcome the problem and revive the transatlantic alliance. In this regard, the article examines extremely recent EU legal and policy developments, including the milestone EU Council decision to establish for the first time a permanent structured cooperation (PESCO) in the field of defense between 25 EU member states in December 2017, and suggests that ultimately defense union stands at the core of the future of Europe – regardless of whether NATO obligations trump EU rules or not.