Romania - NATO

Defence Investment Pledge

The global economic crisis has constantly affected budgetary defence allocations since 2008, aggravating the downward trend in most NATO countries, despite appeals from NATO officials on the dramatic impact on Allied defence capabilities. In 2010, 16 Allies already had low defence budgets compared to 2008, in 2011 their number increased to 18, and in 2014 a number of 21 member states were in this situation. After this period of budget cuts, starting in 2015, the trend has reversed, so in 2016, 22 allies have seen increases in the defence sector. However, in 2016 only 5 allies met the commitment to allocate at least 2% of the Gross Domestic Product to defence, but there has been a downward trend in the number of those who have allocated less than 1%. In terms of spending on major equipment and related R&D activities, in 2016 only 10 states allocated more than 20% of the defence budget, according to the commitment.

In order to ensure the Alliance's capacity to effectively respond to the challenges posed by the new strategic security environment, The Wales Summit Pledge on Defence Investment was agreed at the Wales Summit, which targets member states' commitment to reach the 2% of Gross Domestic Product assigned to defence spending over 10 years (by 2024), with the differences between each group of allies (those who already have this level of funding will maintain it, the others will halt the declining budgets on defence and gradually increase defence spending). In addition, the commitment indicates allocating at least 20% of the defence budget for the acquisition of major equipments and related R&D activities, as well as improving individual results on the level of deployability and sustainability of troops in theaters of operations.

The engagement has a special significance for demonstrating credibility, unity and allied solidarity in the current geostrategic context, reaffirmed by the member states at the Warsaw Summit in 2016 and also at the most recent defence ministerial meeting in Brussels (February 2017 ).

In order to guarantee a national political consensus on financing the defence sector, on 13 January 2015, the Romanian parliamentary parties signed an Agreement on the allocation, starting in 2017, of a minimum 2% of the Gross Domestic Product for the budget of the Ministry of National Defence, and maintaining this level for the next 10 years. The agreement is important, both in terms of ensuring the predictability of the Romanian Armed Forces' endowment policy with modern fighting technique, as well as developing cooperation projects between the national defence industry and other companies in other countries, and also for medium and long-term defence planning. The Agreement is a guarantee that Romania will honor its commitments assumed at allied level, regardless of the political party in the government. In order to complete this national approach, according to the Governance Program 2017-2020, the Procurement strategy for endowment of the Romanian Armed Forces will be completed in the first half of 2017.

On the basis of this political agreement, the Ministry of National Defence developed the Program on the transformation and modernization of the Romanian Armed Forces until 2026 and beyond. The resources planned for the implementation of this program are aimed at developing priority acquisitions programs for the reference period, which contribute directly to increasing the operational capacity of the Romanian Armed Forces.

Against this background, the upward trend in budget allocations was sustained as early as 2016, so the preliminary budget execution for 2016 accounted for 1.42% of GDP and the funds earmarked for the acquisition of major equipments and related R&D activities accounted for 20,46% of the total budget (over 20% of the commitment).

In accordance with the provisions of Law no. 6/2017, the State Budget Law for 2017, the defence budget for 2017 provides, according to the assumed commitment, the allocation of 2% of the Gross Domestic Product and, according to the Governance Program, it is envisaged to maintain this allocation level in the period 2018-2020. In 2017, spending on major equipment acquisitions and related R&D activities represents 46% of the total defence budget.

April 2017

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