NATO’s 1.5% target could generate €822bn infrastructure boost for Europe | Euractiv

To reach the 1.5% goal, European NATO allies would need to invest around €320 billion each year

The commitment by NATO allies to spend 1.5% of their GDP on security-relevant infrastructure could trigger an economic boost of €822 billion annually and generate 4.4 million jobs in Europe, a study by EY and DekaBank found.

“These investments in defence-related infrastructure will have significant economic effects and benefit national economies as a whole, since they – even more so than arms investments in the narrower sense – can strongly stimulate the economy,” Jan Friedrich Kallmorgen, a partner at EY-Parthenon, said in a statement released on Friday.

Last year, NATO allies agreed to increase their defence spending target to 5% of GDP by 2035 following pressure from the US. Of this 5%, 3.5% is to be spent on core defence and 1.5% on broader security-related investments.

To reach the 1.5% goal, European NATO allies would need to invest around €320 billion each year, which in turn would generate €822 billion in production value – a return of 2.51 for each euro invested, according to the study.