EU Currents: Portugal’s Crucial NATO Investment

Background

Despite the concerns about the integrity and future of the North American Treaty Organization (NATO) and the calls for a separate European force to provide defense, Portugal is putting their faith in the alliance, increasing their defense spending to 6.1 billion euros. This investment meets the 2% GDP threshold set by NATO as a short-term goal for members.

The alliance set a long-term goal for members to contribute 5% of their GDP towards defense by 2035 at last year’s NATO Summit at The Hague. According to the agreement, 3.5% of that total is to be utilized to shore up core defense requirements and NATO capability targets, while the remaining 1.5% is to be utilized to protect critical infrastructure and facilities and strengthen each nation’s defense industrial base.

Portugal is pledging to slowly increase spending year-over-year to reach 5% of their GDP by the NATO deadline, despite being historically one of the alliance’s more frugal nations. Minister of Foreign Affairs Paulo Rangel has stated that the nation will accomplish this goal through a yearly increase of the defense budget of more than 450 million euros. 

An International Power Player

The nation is also working to increase their foothold in the defense sector as part of their commitment to meet NATO defense spending thresholds. Portuguese companies like General Workshops of Aeronautical Material (OGMA) have been working to build up their manufacturing base, often in support of other EU defense companies.

Most of the nation’s spending has been toward resources abroad, with the nation investing in Italian ships, German tanks and updated fighter jets. The origin of those jets has not been finalized, as a deal was nearly struck for American F-35’s in 2025, but the move was questioned by Portuguese Defense Minister Nuno Melo. There is a strong possibility that they may look to a European counterpart.

Sweden’s Saab has enlisted the help of OGMA to manufacture components for their Gripen-E fighter jet while Critical Software, a Portuguese technology firm has built a Gripen-E flight simulator. 

“We are working with Saab because it is an interesting challenge and because we can identify with the project,” said Joao Carriera, Critical Software’s chief executive. The company has also worked with German defense companies such as Diehl and Rheinmetall.

“A lot has happened in the past five years,” said Neves, a representative of AED Cluster Portugal. “We have become a serious player with around 20,000 jobs.”

Aside from Critical Software’s work with German defense companies and France’s Airbus, OGMA has worked with Brazilian manufacturer Embraer, developing components for their aircrafts.

Sourcing The Next Generation

Cooperation with fellow European firms is critical to Portugal meeting NATO’s goals, as the Portuguese Air Force’s current inventory of F-16’s are over 30 years old. Sweden’s assistance through the Gripen-E program is invaluable for the Portuguese Air Force and European defense interests and would solve the issue of sourcing updated fighters for Portugal’s inventory.

“The Gripen-E would be a truly European solution,” said Daniel Boestad, vice president of the Gripen program at Saab. “The Gripen-E would strengthen Portuguese and European strategic defense capabilities through long-term industrial partnerships and technological sovereignty.”

Sweden’s willingness to partner with Portuguese defense companies may be a deciding factor for where the nation sources its newest fighter jets. However, there may be one sticking point, and it lies off the coast of Portugal: Lajes Air Base.

Keeping Status Quo

Portugal has allowed U.S. use of this airbase since 1982 and has recently continued to do so in support of the Iranian conflict, in direct contrast with its neighbor Spain, who denied the use of their Morón Air Base. 

Given the choice to not restrict U.S. access to Lajes, Portugal may be under the impression that cooperation with the United States is a necessary action. Thus, Lisbon may feel as if they have no choice but to purchase American fighters in order to keep the American and Portuguese partnership in good standing, according to Bruno Oliveira Martins of the Peace Research Institute Oslo.

“Portugal’s uncritical stance towards the U.S. use of the airbase in the Azores suggests that the Portuguese government possesses little autonomy and resolve to stand up to the US in military matters," he said. 

The Case Against A European Army

Portugal’s approach aligns with the warnings put out by NATO chief Mark Rutte, who insists that European security can only be ensured through the NATO alliance, rather than through a separate EU force.

Aside from the logistical issues of finding separate groups of personnel and resources, Rutte stated that the duplication of effort would set a hypothetical EU army on the back foot from the outset and would invite bad actors to move upon the continent. 

Additionally, Rutte also addressed those nations who believed that a collective force would be a cheaper option in the long run, compared to the 5% GDP target.

“You have to build up your own nuclear capability-that costs billions and billions of euros. You will lose then, in that scenario…the ultimate guarantor of our freedom, which is the U.S. nuclear umbrella,” Rutte said. “So hey, good luck.”