34 c. Budgetary ambition Allies. The increase in Luxembourg’s defence effort must therefore enable us to participate, in solidarity, in a more ambitious European and transatlantic defence and security effort. This will also allow us to initiate a progression of Luxembourg’s defence apparatus and army towards more modern, high-tech capabilities and enable Luxembourg’s Defence structures to aim for a lasting impact. Finally, defence effort investments will also enable Luxembourg society to enjoy not only a higher level of security but also access to capabilities and infrastructure that can equally well be deployed for military purposes or used in Luxembourg for the benefit of the population. At the 2014 NATO Summit in Wales, the Allies committed to reverse the downturn in defence budgets observed since the fall of the Berlin wall and to aim in the medium term at a defence effort amounting to 2% of GDP. The Luxembourg Government announced a first concrete objective: to raise its defence effort from 0.4% of GDP in 2014 to 0.6% in 2020, i.e. an increase in real terms of at least 50%, absorbing which represents a challenge for Luxembourg’s current defence architecture. The proportion of the investment in multinational capabilities with partners will remain high, above the 20% benchmark confirmed by NATO at the Wales Summit. Luxembourg’s annual defence effort will exceed 320 million euros in 2018, amounting to roughly 0.5% of GDP (based on GDP estimated at the time of going to print), while the average for European countries is close to 1.4%. Although Luxembourg’s per capita GDP is one of the highest in the world, our defence effort remains below 1%. This decision is to be viewed in an international context characterized by numerous crises. The increase in defence budgets is also in keeping with Europe’s desire to develop a stronger and more autonomous European defence, be it within NATO or within the EU. Participation in PESCO, in line with Protocol No. 10 of the EU Treaty, will also require a sustained budgetary effort. The international community has expressed an expectation of all of the Within NATO, estimated figures for 2016 are as follows, in increasing order of defence effort2: 4 3.5 3 2.5 2 1.5 1 0.5 0 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 1. Luxembourg (0,42%) / 2. Spain (0,90%) / 3. Belgium (0,91%) / 4. Czech Republic (1,01%) / 5. Slovenia (1,02%) / 6. Hungary (1,02%) / 7. Canada (1,02%) 8. Italy (1,11%) / 9. Albania (1,11%) / 10. Slovak Republic (1,12%) / 11. Denmark (1,14%) / 12. Netherlands (1,16%) / 13. Germany (1,20%) / 14. Croatia (1,21%) 15. Bulgaria (1,30%) / 16. Portugal (1,38%) / 17. Romania (1,41%) / 18. Latavia (1,46%) / 19. NATO Europe (1,47%) / 20. Lithuania (1,49%) 21. Norway (1,55%) / 22. Turkey (1,69%) / 23. France (1,79%) / 24. Poland (2,01%) / 25. United Kingdom (2,17%) / 26. Estonia (2,18%) / 27. Greece (2,36%) 28. NATO Total (2,43%) / 29. North America (3,36%) / 30. United States (3,61%) 2 http://www.nato.int/nato_static_fl2014/assets/pdf/pdf_2016_07/20160704_160704-pr2016-116.pdf