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The US and its allies will need 10 trillion dollars for rearmament

Natasha Kumar By Natasha Kumar Apr9,2024

USA and allies will need $10 trillion to rearm

The US and allies will need about $10 trillion to rearm. A new rearmament race may cause a number of difficult decisions for Western governments.

This is reported by RBC-Ukraine  with reference to Bloomberg.

Last year, global defense spending reached a record 2, 2 trillion dollars. NATO countries are trying to reach the level of 2% of GDP on defense. But some officials say defense funding needs to increase to 4% to meet the alliance's plans.

According to Bloomberg calculations, if the US and its G7 allies reached this level, it would mean additional obligations of more than 10 trillion dollars over the next decade.

The publication notes that the harsh reality for the US and its allies is that dictator Vladimir Putin's efforts in Ukraine mean that they need to dramatically strengthen defenses in Eastern Europe at the same time as creating a counterweight to China. At this time, Beijing is increasing cooperation with Moscow.

On the other hand, Chinese leader Xi Jinping has announced plans to seize Taiwan by force and is making claims in other regions of the Asia-Pacific region. This is forcing Western leaders and their constituents to tackle tax, welfare and government debt problems that have been brewing for years.

Bloomberg Economics analysts believe that for most NATO members, the growing burden of preparing for war will create a new financial paradigm. The poorer countries of the Alliance will have to make a choice between raising taxes, reducing other parts of the budget and borrowing.

The publication believes that France, Italy and Spain may suffer the most if additional expenses are financed through bond markets. Even the US, which already spends 3.3% of GDP on defense, could see borrowing rise to 131% from 99% over the next decade.

While the wars in Ukraine and Gaza have drawn attention to Europe and Middle East, a sharp increase in defense spending is a global phenomenon. For example, in 2024, China's defense spending will increase by 7.2%.

NATO defense spending

Recall that a decision was made at the July NATO summit in Vilnius, according to which the minimum amount of defense spending is set at 2% of GDP.

Previously, NATO Secretary General Jens Stoltenberg reminded Germany of its commitment to increase the military budget to this level.

He also noted that during the Cold War, defense spending amounted to 3 to 4% of GDP.

Natasha Kumar

By Natasha Kumar

Natasha Kumar has been a reporter on the news desk since 2018. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Times Hub, Natasha Kumar worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my natasha@thetimeshub.in 1-800-268-7116

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