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The Guardian
19 hours ago
- Business
- The Guardian
Germany urgently needs to attract migrant workers – it just doesn't want them to feel welcome
Friedrich Merz's government has sent a clear message to anyone thinking about coming to live in Germany: don't. Yet its message to those who want to come to Germany to work is: we need you. This might sound like a contradiction, but it is a revival of the thinking that drove the 'guest worker' programme of the postwar boom years. Between 1955 and 1973, West Germany sought to rebuild its economy by attracting labour, mainly from Turkey but also from Italy, Portugal and Yugoslavia. Yet it did so without giving much consideration to the human needs of the people coming. Repeating that experiment, and the social tensions it created, at this moment would be even worse. The Wirtschaftswunder (economic miracle) fuelled record growth and labour shortages. Now, Germany's economy is in recession, but it desperately needs people to fulfil basic public services. Above all, it needs them to help finance its mounting pensions bill. Given that Germany has also become ground zero for Europe's heightened sensitivity around immigration after the backlash that followed Angela Merkel's open-door policy towards Syrian refugees a decade ago, it's worth paying attention to how Berlin navigates the issue. So far, Merz is providing a masterclass in what not to do. On the one hand, the conservative chancellor is fuelling rightwing narratives that suggest migration is a threat to the country. On the other, he speaks as the voice of German business and pleads for more foreign workers. 'We need skilled immigrants as drivers of progress,' Merz said this month, at a ceremony to honour the contributions of Özlem Türeci and Uğur Şahin – the Turkish immigrants behind Covid vaccine pioneer BioNTech. He added that anti-immigration 'ideologies' were a threat not just to Germany's prosperity 'but even worse, their narrow-mindedness threatens the future of our liberal order'. But his government has sent exactly the kind of signal he claims to decry. Germany has continued with a new policy of rejecting asylum seekers at its borders, despite a court order calling it unlawful and a violation of EU law. The border rejections standoff comes despite a dramatic decline in refugees – up to April 2025, the figures were down by nearly half from the previous year. Another leg of Merz's anti-migration strategy is to put an end to 'turbo naturalisation', which allows newcomers the opportunity to apply for a German passport after as little as three years in select cases. The official justification is that ending fast-track citizenship will eliminate a 'pull factor' and reduce illegal migration. But obtaining citizenship and skirting migration rules have nothing to do with one another. Crossing the border as an irregular migrant can be an act of desperation, and at times opportunism. Getting a German passport requires legal residency at the very least, but also involves various hurdles and a significant amount of paperwork. The fast-track procedure is even more discretionary and reserved for people that exhibit 'exceptional integration efforts', such as speaking German at an advanced level, consistently paying taxes and taking part in the community, for example by volunteering at local charities or sports clubs. Eliminating that route, which only opened in June 2024, will have very little impact. Last year – when a rush to take advantage of the new process might have been expected – only about 7% of people receiving German citizenship had an accelerated application, according to federal statistics agency Destatis. But Merz's moves reinforce the narrative that Germany is being overwhelmed by newcomers. The approach bolsters the far-right AfD – a close second in the polls – which has called for the deportation of thousands of people, including some with migrant backgrounds who hold German citizenship. Controlling entry is legitimate, but such grandstanding policies fuel xenophobic sentiment and don't allay the worries of anxious citizens. Also, the political dividends are limited. Sign up to This is Europe The most pressing stories and debates for Europeans – from identity to economics to the environment after newsletter promotion While the fevered discussion around migration has kept it as the top issue for Germans, only 38% of people ranked it as one of their three main concerns, which is four percentage points lower than in April, according to an Ipsos survey. Economic concerns such as inflation and poverty/inequality are the other top concerns. The harder-to-face reality is that Germany could use all the help it can get. With older Germans heading into retirement by the millions over the coming decade, the country must welcome a net 400,000 newcomers each year to keep things balanced and shoulder the rising cost of pensions. But this isn't the postwar era, where Germany can sign agreements with poorer countries and expect thousands to arrive. There's global competition for qualified workers, and Germany is at a disadvantage because of its language and its reputation for being unwelcoming. That's a legacy from the mismanaged Gastarbeiter (guest worker) programme, when Germany had neither a plan for how to integrate the people it lured for work, nor the desire to do so. It also reflects a national identity left narrow and underdeveloped due to its Nazi past. The former footballer Mesut Özil, born in 1988 to a Turkish guest-worker family in Germany's Ruhr Valley, never felt fully accepted. Though he played a starring role in Germany's 2014 World Cup win, he said: 'When we win, I'm German; when we lose, I'm a foreigner.' His story shows how acceptance is out of reach for many. And it's not isolated. According to a recent study by the Friedrich Ebert Foundation, between 2015 and 2022, 12 million people migrated to Germany. The study also said that, in the same period, more than 7 million migrants left again. The main reasons were difficulties feeling part of German society. The next blow could be looming. According to a study by Germany's Institute for Employment Research, a quarter of migrants in the country – around 2.6 million people – are considering packing up and leaving. Germany's self-imposed isolation will lead to a slow erosion of the labour force unless it is urgently addressed. Revising the narrative around migration to recast it as part of the solution would be a good starting point. But the political class hardly looks ready. As Markus Söder, the conservative premier of Bavaria, recently told the rightwing media outlet NiUS: 'Of course we need immigration– unfortunately.' Chris Reiter and Will Wilkes are the co-authors of Broken Republik: The Inside Story of Germany's Descent Into Crisis. Both cover Germany from Berlin and Frankfurt, respectively, for Bloomberg News Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here.
The Diplomat
a day ago
- Business
- The Diplomat
How 90 Days of Accelerated Trade Alliances Reshaped Southeast Asia
The significant global trade policy activity following the United States' announcement – and subsequent pause – of reciprocal tariffs is set to profoundly impact the future trajectory of international trade. Southeast Asia stands out, due to the staggering number of new multilateral alliances and bilateral partnerships it has found itself in the midst of. Three distinct power centers of trade – the European Union, China, and the Gulf Cooperation Council (GCC) – have emerged, with ambitions to strategically ramp up trade with the region. This is being complemented by efforts to strengthen existing relationships among Southeast Asian countries, including through leveraging digitalization to boost regional trade. Southeast Asian countries, having faced some of the highest reciprocal tariff rates under the Trump administration, were expected to proactively diversify their trade relationships. However, leading global trading powers – with the EU, China, and the GCC at the front of the line – have reached out first, showing they are more than keen to forge new partnerships. The motivation for this outreach is not rooted in just the manufacturing or export capabilities of the region but also its growing role as a consumer of global goods. The significant economic potential of Southeast Asia is actively reshaping its competitive edge and causing tectonic shifts in global trade relationships. International trade ties look set to strengthen in the Southeast Asian region and beyond, independent of the fate of the United States' reciprocal tariffs. Evolving Rhetoric on Global Trade As the 90-day pause on U.S. reciprocal tariffs approaches its July 9 end date, initial concerns about the imminent breakdown of a rules-based global trade order have notably shifted. Instead, the narrative is being shaped by overwhelming international consensus on the critical importance of a multilateral trading system. From Germany's former Chancellor Angela Merkel to Singapore's Deputy Prime Minister Gan Kim Yong, leaders from across the globe have been openly advocating for forging new alliances to not only defend but also expand a rules-based trading system. As a testament to the diversity of emerging alliances, the Association of Southeast Asian Nations (ASEAN) recently released a joint statement with Japan, China, and South Korea, reaffirming the group's commitment to multilateralism in trade. The continued preference for an open, inclusive, equitable, and transparent multilateral trading system indicates the value seen in the core tenet of free trade: realizing economic gains through pursuit of comparative advantage across borders. The risk from greater protectionism is not just limited to direct tariffs, but their second-order effects, including the overall collapse in global demand for goods from export-driven economies. Hence, countries recognize the critical importance of stepping up to keep free trade alive and are proactively building new frameworks of cooperation to achieve this goal. As economies take action to realign their trade priorities, Southeast Asia is fast emerging as an epicenter for engagement. In the 90 days since the announcement of Liberation Day tariffs, three distinct trade trends have emerged in Southeast Asia: diversification of trade partners, the emergence of new trade power centers, and an emphasis on intra-ASEAN trade. Diversification of Trade Partners to Build New Plurilateral Alliances Southeast Asian countries are pursuing previously unexplored trade partnerships to forge new alliances or build on existing economic groupings and plurilateral agreements. As one example, Malaysia hosted the first ever ASEAN-GCC-China summit on May 27. While this has not been formalized into a binding alliance, it is a first for this grouping of countries, representing more than 20 percent of the world's GDP, to unite and pursue mutual trade goals. There are three interconnected tracks that the group hopes to pursue, the ASEAN-China Free Trade Area (ACFTA) 3.0 Upgrade, the proposed ASEAN-GCC Free Trade Agreement (FTA), and indirectly, the China-GCC FTA. Separately, in a recent joint statement, members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) announced their intention to commence trade dialogues with the EU and ASEAN. This is a novel association more for the EU than ASEAN, as the latter already has overlapping members (Brunei, Malaysia, Singapore, and Vietnam) with the CPTPP. While the EU is unlikely to formally join the CPTPP, closer cooperation can be expected in addressing trade barriers, coordinating response to the U.S. tariffs, and harmonizing rules in new areas such as digital trade and sustainability. Another economically formidable trade bloc consisting of ASEAN, the United Kingdom, and Australia, informally dubbed as ASEANAUK, has garnered interest recently. Its key goals are expected to be centered around promoting economic security and supply chain resilience. The CPTPP will be a key starting point, as the U.K., Australia, and four of ASEAN's 10 member-states already belong to the trans-Pacific trade bloc. Emergence of New Power Centers of Trade The growing economic prominence of Southeast Asian countries has attracted the attention of leading global trade powers. Europe, China, and the Gulf states are all strategically working to expand their spheres of influence in the region to forge new economic partnerships and fill the vacuum left by the U.S. For the first time ever, this year's edition of Asia's premier security forum, the Shangri-La Dialogue, featured a keynote by a European leader. French President Emmanuel Macron presented his argument for the creation of a new coalition between Europe and Asia to uphold global norms for open trade, calling it a 'third way' alternative to the U.S. and China. This is reflective of Europe's overall pivot toward outreach to like-minded rising Asian powers, which are currently among the fastest growing consumer markets globally. The EU has a number of active engagements with Southeast Asian markets. Recent developments include the signing of an Agreement on Digital Trade with Singapore to set global standards for digital trade and reinvigoration of trade negotiations with Indonesia, Malaysia, and Thailand. Within days of the United States' announcement of reciprocal tariffs, Chinese President Xi Jinping embarked on a three-country tour to the hardest hit economies in the Southeast Asian region. His goal was clear: to build meaningful partnerships for safeguarding the multilateral trading system. He visited Cambodia, Vietnam, and Malaysia to shore up trade ties and ended up signing 37, 45, and 31 agreements with these states, respectively. Following this, China reaffirmed its commitment to ASEAN, writ large, by concluding negotiations for the China-ASEAN FTA version 3.0, which includes new elements such as the digital and green economies. These are indicative of China's bolstered intent to intensify engagement with SEA economies in a bid to stand up a broader coalition to protect the global free trade system. As the newest bloc to strategically engage with the Southeast Asian region on trade, the GCC has been building momentum for the past few months through FTA negotiations with Indonesia, which are expected to conclude by the end of 2025. The GCC recently commenced FTA negotiations with Malaysia as well, on the sidelines of the ASEAN Summit. Another key outcome of this summit was the GCC signing up as a primary participant in the new ASEAN-GCC-China trading bloc. There are significant economic gains based on comparative advantage to be unlocked through these new relationships. Moreover, the GCC's size and spending potential promise to make it a valuable trade partner for ASEAN. Strengthened Intra-ASEAN Trade Commitment Amid increased international engagement, Southeast Asian countries are also renewing their commitment to regional cooperation through both rhetoric and concrete actions. In a macro-level effort to boost regional trade and deepen intra-ASEAN integration, the bloc recently concluded negotiations on an upgraded ASEAN Trade in Goods Agreement. This revision further lowers all remaining regional tariffs and significantly removes non-tariff barriers to improve trade flows and enhance regional supply chain resilience. Zooming in to the bilateral level, Thailand and Indonesia, Southeast Asia's two biggest economies, are setting up a joint government committee to promote bilateral trade. Vietnam recently upgraded its relationship with Thailand to 'comprehensive strategic partnership' status, the highest such ranking used by Hanoi, to significantly expand market access and boost investment. This is Vietnam's fourth such partnership with a fellow ASEAN country and indicates its interest in being a key participant in strengthening regional ties. There has also been increased traction for Singapore and Malaysia's newly announced Johor-Singapore Special Economic Zone, which is set to enhance the economic interlinkages between the two countries and be a platform for boosting ASEAN's overall supply chain resilience. Looking Ahead All the above movement in trade policy has occurred in just the last three months. The speed is a testament to the agility with which countries are willing to move to preserve an open global trading order. While a complete pivot away from the United States is not on any country's agenda, there is an emerging transition from the previous 'China + 1' strategy to a 'U.S. + n' approach. Here 'n' stands for proactive trade diversification by forging new relationships with not just one, but a number of countries. New trade alliances are excellent for realizing previously untapped comparative advantage-related gains and building closer geopolitical ties. This is something that middle powers such as the Southeast Asian countries are increasingly excelling at. If this continues, it looks like the future may belong to middle powers leading global economic growth through greater autonomy and close cooperation among each other. Such a truly multipolar world with numerous players championing free trade may have sounded fantastical just a few months ago, but apparently a lot can happen in 90 days.
The Guardian
a day ago
- Business
- The Guardian
Germany urgently needs to attract migrant workers – it just doesn't want them to feel welcome
Friedrich Merz's government has sent a clear message to anyone thinking about coming to live in Germany: don't. Yet its message to those who want to come to Germany to work is: we need you. This might sound like a contradiction, but it is a revival of the thinking that drove the 'guest worker' programme of the postwar boom years. Between 1955 and 1973, West Germany sought to rebuild its economy by attracting labour, mainly from Turkey but also from Italy, Portugal and Yugoslavia. Yet it did so without giving much consideration to the human needs of the people coming. Repeating that experiment, and the social tensions it created, at this moment would be even worse. The Wirtschaftswunder (economic miracle) fuelled record growth and labour shortages. Now, Germany's economy is in recession, but it desperately needs people to fulfil basic public services. Above all, it needs them to help finance its mounting pensions bill. Given that Germany has also become ground zero for Europe's heightened sensitivity around immigration after the backlash that followed Angela Merkel's open-door policy towards Syrian refugees a decade ago, it's worth paying attention to how Berlin navigates the issue. So far, Merz is providing a masterclass in what not to do. On the one hand, the conservative chancellor is fuelling rightwing narratives that suggest migration is a threat to the country. On the other, he speaks as the voice of German business and pleads for more foreign workers. 'We need skilled immigrants as drivers of progress,' Merz said this month, at a ceremony to honour the contributions of Özlem Türeci and Uğur Şahin – the Turkish immigrants behind Covid vaccine pioneer BioNTech. He added that anti-immigration 'ideologies' were a threat not just to Germany's prosperity 'but even worse, their narrow-mindedness threatens the future of our liberal order'. But his government has sent exactly the kind of signal he claims to decry. Germany has continued with a new policy of rejecting asylum seekers at its borders, despite a court order calling it unlawful and a violation of EU law. The border rejections standoff comes despite a dramatic decline in refugees – up to April 2025, the figures were down by nearly half from the previous year. Another leg of Merz's anti-migration strategy is to put an end to 'turbo naturalisation', which allows newcomers the opportunity to apply for a German passport after as little as three years in select cases. The official justification is that ending fast-track citizenship will eliminate a 'pull factor' and reduce illegal migration. But obtaining citizenship and skirting migration rules have nothing to do with one another. Crossing the border as an irregular migrant can be an act of desperation, and at times opportunism. Getting a German passport requires legal residency at the very least, but also involves various hurdles and a significant amount of paperwork. The fast-track procedure is even more discretionary and reserved for people that exhibit 'exceptional integration efforts', such as speaking German at an advanced level, consistently paying taxes and taking part in the community, for example by volunteering at local charities or sports clubs. Eliminating that route, which only opened in June 2024, will have very little impact. Last year – when a rush to take advantage of the new process might have been expected – only about 7% of people receiving German citizenship had an accelerated application, according to federal statistics agency Destatis. But Merz's moves reinforce the narrative that Germany is being overwhelmed by newcomers. The approach bolsters the far-right AfD – a close second in the polls – which has called for the deportation of thousands of people, including some with migrant backgrounds who hold German citizenship. Controlling entry is legitimate, but such grandstanding policies fuel xenophobic sentiment and don't allay the worries of anxious citizens. Also, the political dividends are limited. Sign up to This is Europe The most pressing stories and debates for Europeans – from identity to economics to the environment after newsletter promotion While the fevered discussion around migration has kept it as the top issue for Germans, only 38% of people ranked it as one of their three main concerns, which is four percentage points lower than in April, according to an Ipsos survey. Economic concerns such as inflation and poverty/inequality are the other top concerns. The harder-to-face reality is that Germany could use all the help it can get. With older Germans heading into retirement by the millions over the coming decade, the country must welcome a net 400,000 newcomers each year to keep things balanced and shoulder the rising cost of pensions. But this isn't the postwar era, where Germany can sign agreements with poorer countries and expect thousands to arrive. There's global competition for qualified workers, and Germany is at a disadvantage because of its language and its reputation for being unwelcoming. That's a legacy from the mismanaged Gastarbeiter (guest worker) programme, when Germany had neither a plan for how to integrate the people it lured for work, nor the desire to do so. It also reflects a national identity left narrow and underdeveloped due to its Nazi past. The former footballer Mesut Özil, born in 1988 to a Turkish guest-worker family in Germany's Ruhr Valley, never felt fully accepted. Though he played a starring role in Germany's 2014 World Cup win, he said: 'When we win, I'm German; when we lose, I'm a foreigner.' His story shows how acceptance is out of reach for many. And it's not isolated. According to a recent study by the Friedrich Ebert Foundation, between 2015 and 2022, 12 million people migrated to Germany. The study also said that, in the same period, more than 7 million migrants left again. The main reasons were difficulties feeling part of German society. The next blow could be looming. According to a study by Germany's Institute for Employment Research, a quarter of migrants in the country – around 2.6 million people – are considering packing up and leaving. Germany's self-imposed isolation will lead to a slow erosion of the labour force unless it is urgently addressed. Revising the narrative around migration to recast it as part of the solution would be a good starting point. But the political class hardly looks ready. As Markus Söder, the conservative premier of Bavaria, recently told the rightwing media outlet NiUS: 'Of course we need immigration– unfortunately.' Chris Reiter and Will Wilkes are the co-authors of Broken Republik: The Inside Story of Germany's Descent Into Crisis. Both cover Germany from Berlin and Frankfurt, respectively, for Bloomberg News
Local Germany
4 days ago
- Politics
- Local Germany
How would conscription in Germany impact dual nationals and foreigners?
Germany had mandatory conscription between 1957 and 2011, when it was suspended by then-Chancellor Angela Merkel's government. In June 2025, the new government has said it will introduce a bill which could reintroduce a form of mandatory military service if too few volunteers sign up. The German public appear to be in favour of the move. The aim is to increase the size of the armed forces from 180,000 to up to 260,000. The government also wants to double the number of reservists. READ ALSO: Majority of Germans favour a return to conscription Specific details of the bill have yet to be worked out, so the precise rules for any future conscription aren't yet known. Nevertheless the provision in the constitution which allows for conscription was only suspended by Merkel, meaning the government could reintroduce the previous system relatively straightforwardly, albeit with a change to the law. What were the previous rules on conscription? Germany's Basic Law (constitution) allowed for men turning 18 to be conscripted into the Bundeswehr (armed forces), Border Force, or civil defence, for six months. Advertisement Conscientious objection was explicitly permitted. Anyone who refused to serve had to be offered alternative non-violent service. In most cases, only residents of Germany were liable for conscription. Germans living abroad weren't generally obliged to participate. The new bill proposed by the government will focus first on boosting the size of the army by recruiting more volunteers. But some members of the government, including Defence Minister Boris Pistorius, back conscription if there are too few volunteers in a given year. Under the rules, if the government declares a so-called 'state of tension' or 'state of defence' (when Germany is likely to or has already come under armed attack), every male German between 18 and 60 is eligible for military service. Who could be conscripted? Under the previous system, which could be reintroduced straightforwardly, all German men turning 18 were eligible for conscription. Advertisement The provision did not include women. The government has not suggested that any new bill would amend the Basic Law, so iit seems likely women would continue to avoid conscription. The government currently plans to introduce 'Swedish-style' conscription, meaning that school leavers could be asked to fill in a questionnaire covering questions like their level of fitness and willingness to join the military. Answering would be compulsory for men and optional for women. Answers would help determine who is then ordered to join the military. What about foreign residents and those with dual nationality? In general, dual citizens can expect to be treated like any other German when it comes to military service, according to Professor Walther Michl, chair of public law at the University of the Bundeswehr in Munich. 'Dual citizenship does not change the obligation to serve in the armed forces,' he told Frankenpost in 2023. 'If discrimination is applied, it is usually based on objective criteria such as the level of fitness determined during the medical examination, age, or experience of basic military training, not on dual nationality,' he added. READ ALSO: Military service 'could be made mandatory' says German Defence Minister Boys born in Germany to foreign parents, for example, would have to fill out the questionnaire and could be conscripted. Under the previous law, Germany had agreements with a number of third countries such as Switzerland and Turkey to avoid dual citizens having to do military service twice. Citizens of two or more countries are generally conscripted in the country in which they are resident when they turn 18. Under the Basic Law, only German citizens were eligible for conscription; so foreigners who are permanent residents could not be conscripted without a change to the constitution. Could my child be forced to serve in the army? The number of people who are conscripted is likely to be fairly low. Advertisement Military authorities prefer an army staffed by volunteer soldiers, considered more effective than conscripts who only serve for a short time. Recruitment efforts are likely to focus on them first, then on school leavers who've expressed interest in joining the army. If your child is ordered to join the army but doesn't want to serve, he can register as a contentious objector. This right is protected by the Basic Law, meaning that the authorities are legally obliged to offer your child alternative, non-violent service – such as working for a charity or the emergency services. In summary... If you're a woman, you're unlikely ever to be conscripted without a change to the Basic Law. If you're a male German citizen, including dual nationals, between the ages of 18 and 60, you could be conscripted during a 'state of defence' or 'state of tension'. READ ALSO: German military sees Russia as 'existential risk' to Germany and Europe: report These "states" can be declared by the government during times of heightened international tension, or when Germany has come under armed attack. Even in these cases, your right to object will still be protected under the constitution. If you do not want to serve in the army, you have to be offered an alternative. Foreign permanent residents who are not German nationals would not be conscripted.
Telegraph
5 days ago
- Business
- Telegraph
Why Nato's spending plans don't add up
'They're delinquent, as far as I'm concerned,' Donald Trump vented as he stood front and centre amongst allies at a customary leaders' photo op ahead of a Nato summit in 2018. 'Massive amounts of money is owed,' the US president went on as the awkward figures of Germany's Angela Merkel and Britain's Theresa May looked on. Berlin was the main victim of the metaphorical artillery barrage against those national governments failing to meet an annual defence spending target of 2 per cent of GDP. Mrs Merkel had presided over more than a decade of neglect of the Bundeswehr, while pouring billions into Russia's budget through the purchase of cheap oil and gas. 'So we are protecting you against Russia, but they're paying billions of dollars to Russia?' Mr Trump asked sarcastically. Those chaotic 48 hours in Brussels, the Belgian capital, are said to have been the most consequential in Nato's recent history. That is until Mr Trump touches down in the Hague this week as the Western military alliance holds its traditional annual summit. Seven years on, the US president's feelings about Nato have not changed. European diplomats and officials still fear he could decide to pull US troops from the continent at the drop of a hat. That is why any talks in the Dutch capital will focus on one thing, and one thing only – a pledge to increase defence spending to 5 per cent of GDP. Most allies believe the times we live in and geopolitical challenges they face warrant such a decision. However, the main reason for signing off on a decision to hike defence expenditure by more than two-fold lies almost solely in who occupies the White House's Oval Office. Same old faces There are a host of familiar faces from the 2018 summit still floating around the alliance. Mark Rutte, the former Dutch prime minister, is now Nato's secretary-general. Pedro Sanchez remains Spain's prime minister, and France is still ruled by president Emmanuel Macron. But this time round, all the planning is designed to avert these returning politicians, or anyone who did not experience it, becoming victims of a barrage of hellfire from Mr Trump. A tale of the pre-summit tape reveals that most allies have made a concerted effort to follow the narrative required to keep the US president on the straight and narrow. And all eyes will be on Mr Trump, who made the biggest gamble of his presidency on Saturday night when he bombed Iran's heavily fortified Fordow nuclear facility. The damage to the site remains unclear but, if Mr Trump has made the right move, he will have destroyed Tehran's hopes of building a nuclear weapon – at least for now. If it was the wrong decision, the Middle East could be plunged into violent turmoil and draw America into a 'forever war'. For Nato, that would mean its biggest donor turning its attention away from the military alliance, away from the Ukraine war, and towards its own war. It could also mean Nato's fears coming true – Mr Trump pulling American troops from Europe. The second Donald in the room will be Donald Tusk, the Polish prime minister, whose government presides over the highest defence spending per percentage of GDP in the entire alliance at 4.12 per cent. In theory, Poland is the only member state, including the US, that hits the 3.5 per cent 'core defence' target when it is signed off in The Hague. Washington only spends about 3.38 per cent, according to the latest figures released by Nato. Those figures show that 23 of the alliance's 32 allies are currently hitting the 2 per cent target of GDP set over a decade ago in 2014. Canada, Italy, Luxembourg and Spain will only reach that decade-old goal this year. Spain poses biggest challenge Mr Sanchez and Madrid pose the biggest challenge to any attempt to further increase the overall defence spending goal to 5 per cent. In a letter to Mr Rutte ahead of the Hague summit, the Spanish prime minister wrote: 'Reaching 5 per cent defence spending will be impossible unless it comes at the cost of increasing taxes on the middle class, cutting public services and social benefits for their citizens.' The letter worked for Mr Sanchez, with Spain reaching a deal with Nato exempting it from the alliance's 5 per cent target – a move that will further frustrate Mr Trump. 'Spain has just concluded a deal with Nato... which will allow us to respect our commitments towards the Atlantic alliance... without having to raise our defence spending to five percent of gross domestic product,' Mr Sanchez said in a speech from the Moncloa palace on Sunday. Spain is one of the governments arguing that hitting new Nato capability targets does not require extra money but smarter spending. Luxembourg has delivered a similar message. 'It will be the capabilities that will keep us safe, not percentages,' Yuriko Backes, its defence minister, recently argued. But these are rare shows of dissent, with most member states keen to flatter Mr Trump into a state where he's not willing to raise questions over the alliance's unity. Even before he entered office, most European and Canadian allies had decided to raise defence spending because of the renewed threat posed by Russia. This won't stop them from attributing those decisions to the US president. The Baltics and recently joined Sweden and Finland have surged spending in response to Vladimir Putin's invasion of Ukraine. Estonia has set out plans to spend at least 5 per cent of its annual GDP on defence for the foreseeable future. Lithuania and Latvia have budgeted for more than 3 per cent. Britain's defence woes Britain has always been considered a front-runner when it comes to Nato's spending targets. Since the Wales pledge of 2 per cent in 2014, the country was one of four allies to have met the target consistently. But with 5 per cent looming as a new goal, Sir Keir Starmer risks falling well behind. The Prime Minister has committed to spending only 3 per cent by 2034, long after the envisaged deadline of 2032. British officials have argued that the country will need extra time to meet the goal of 3.5 per cent without putting government finances under unnecessary pressure. Another caveat is that the world could be considered a greatly different place in nine years time. The main change is that there will be no Mr Trump in the White House to badger European allies and Canada over their defence expenditure. Whatever happens, Britain will be likely to slip down the rankings of Europe's most reliable armed forces. Yes, the nuclear deterrent will remain committed to Nato's joint strategy, but the likes of France 's, Germany's and the Netherland's militaries will have grown at a much faster rate if their spending plans are delivered as promised. Mr Macron has promised defence spending will jump to over 3 per cent, while Berlin has set out a strategy for assuming the mantle of Europe's most powerful military, taking that title from Britain. 'We are following him there,' Johann Wadephul, the German foreign minister, said of Mr Trump's demand for spending to increase to 5 per cent of GDP. Creative accounting The consensus for meeting Mr Trump's demanded target is largely there. But the catch is that it will require a large degree of compromise and creative accounting to hit those numbers. Mr Rutte, who was made Nato's secretary-general almost entirely because of his past successes of dealing with the American, has delivered the first element of creativity. His plan for the new benchmark is to divide it up into different areas of spending. The first 3.5 per cent will be spent on areas of core defence: tanks, fighter jets, air defence systems, long range missiles and troops. The remaining 1.5 per cent will be able to include government budgets spent on 'defence and security-related investment, including in infrastructure and resilience'. The Telegraph recently reported that Sir Keir is looking to broaden the scope of national security in Britain to help meet that target. Essentially this means things like rural broadband, useful for communications if Britain is one day attacked, or runway expansions, handy for warplanes, can be counted towards the 1.5 per cent goal. Spain is hatching similar plans, suggesting it will allocate money already spent on past Nato challenges, like migration and climate change. Diplomatic sources within Nato have said ministries across the alliance dealing with infrastructure projects will be licking their lips at the prospect of funds being redirected their ways to help with the targets. The prevailing view is that numbers and not battle plans will be the only way to woo Mr Trump enough to prevent him from repeating the ruckus of 2018. Olga Olike, of the Crisis Group, said: 'The hard part isn't agreeing to a percentage of GDP. The hard part will be defining, and then implementing, strategies that credibly deter Russia and assure allies, regardless of what the US does.' Lessons learnt The main lesson taken from that chaotic summit in Brussels was that the best way of handling the US president is to acknowledge, appease and ultimately praise him. Officials supporting Mr Rutte will have produced a mass of data to back up his claims that Europe and Canada are already spending more because of Mr Trump. It took Mr Trump less than two minutes to use a figure of $33 billion in extra defence spending that was handed to him hours earlier at the past summit: 'I let them know that I was extremely unhappy with what was happening, and they have substantially upped their commitment,' he told a post-summit news conference. 'And now we're very happy and have a very, very powerful, very, very strong Nato, much stronger than it was two days ago.' While he is not scheduled to give a press conference, officials will be looking to arm him with enough positive ammunition should he change his mind, as was the case in 2018. This time, those numbers will be much greater. Since 2018, Nato member states, excluding the US, have pledged around $500 billion of extra defence spending - more than 55 per cent since Mr Trump's intervention in Brussels. And then there is that spending commitment of 5 per cent, a number conflated entirely to meet demands set by the US President.
