Norway Pledges to Reach NATO’s Spending Goal Amid Windfall Revenues

Barracks of the military base of the armored battalion are pictured in Setermoen, northern NorwayInternationalIndiaAfricaNorway has the highest defense spending per capita in the NATO alliance, trailing only the US, yet has fallen behind its designated goal due to unexpected profits that dwarfed the military budget.Norway will meet NATO’s spending goal of 2 percent of its GDP by 2026, its Prime Minister Jonas Gahr Store has pledged, calling it “urgent, but realistic.”Until now, Norway has been among the member states that are lagging behind, with no concrete plan for how to reach this goal. However, the windfall state revenues following the conflict in Ukraine, which made Norway the EU’s top energy supplier, made reaching the spending target all the more important, according to Store.”Per inhabitant, Norway spends the most on defense in NATO after the US. But we are one of the countries that has not had a plan to reach the two-percent target. We have that now,” Store said in a statement. “In a year with extraordinarily high incomes, we must stay the course. We want long-term planning and upsurge,” he added.Finance Minister Trygve Slagsvold Vedum admitted that over time, Norway has spent less money on defense and argued that targeted investments in the armed forces will “serve Norway well.” In 2022, Norway spent 1.57 percent of its GDP on military matters, falling below NATO’s target of 2 percent adopted in 2014. During the year, Norway received record high revenues from the oil and gas industry, as well as the high electricity prices which dwarfed the defense sector. This year, Norway is set to spend 1.4 percent of its GDP on defense, which is NOK 32 billion (nearly $3 billion) away from the NATO goal.In October 2022, the Norwegian government granted its military budget a nearly 10-percent increase, citing the conflict in Ukraine. Defense Minister Bjorn Arild already pledged an additional NOK 11 billion (nearly $1 billion) by 2026, with an annual increase of NOK 3.6 billion ($330 million), citing the need to “re-prioritize.”The US, which accounts for the majority of NATO’s contributions, has championed increased spending in the European countries, pushing them to pursue compliance with the joint goal. According to Store, Norway’s plan to reach the target will be presented at the NATO summit in Vilnius in July.Norway initially reached the target in 2020 after an economic contraction, but the expansion in the oil-rich economy amid energy prices close to record highs has pushed it away from the goal.Energy Crisis in EuropeNorwegian Oil Giant Pockets Fivefold Profits, Gets Flak for Profiteering17 March, 09:49 GMTFollowing the energy war unleashed against Russia by the EU and, broadly, the West, Norway has has taken the lead from Russia in supplying energy to Europe. The Nordic country plans to keep its natural gas and oil production at their current high levels, as Europe continues to battle a power-generation crisis that threatens to hamstring its industry. Norway said it expected to maintain the current production levels at least until 2030, potentially raising it above recent years’ records.

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