Outlook for Ensuring of Defensibility and the Fulfillment of Alliance's Expenditure and Investment Commitments in the Context of the Current Economic Situation

Abstract

The guarantee of national defense and the fulfillment of commitments to Allies is highly dependent on its financial source security. The economic recession, which began in 2008 in the USA, negatively affected public budgets. This recession was one of the causes of the reduction of planned defense spendings in the Czech Republic. This reduction caused the postponement of acquisitions, which were to be implemented both with regard to commitments to coalition partners and with regard to maintaining their own defense capabilities. Nowadays, current internal debt is still increasing due to neglecting inflation of military equipment, which is higher than inflation of ordinary goods. Currently, the defense ability is also affected by the pandemic of Covid-19, which caused a slowdown in GDP growth and public spending growth. For this reason, it has been several times postponed the commitment to achieve a rate of 2% of military expenditure of GDP by 2024 and the current plan to achieve it in 2027 is also endangered.

Keywords

• alliance commitment
• defensibility
• internal debt
• inflation
• defense expenditure