By Simon Shuster / Munich
February 20, 2017

The European Union may not feel much like a family these days, but its leaders do tend to bicker like one over questions of money and pride, especially when they have a grumpy uncle named Donald Trump calling in debts on defense spending from across the Atlantic.

So it was at the Munich Security Conference this weekend, an annual gathering of senior officials from around the world at a plush hotel in the Bavarian capital. It’s normally a collegial affair, intended to reaffirm the transatlantic bond against whatever threats the U.S. and Europe see in a given year. But this time was different.

Under pressure from the Trump administration to fulfill NATO’s spending targets on defense or face the consequences, some European statesmen openly accused their allies of being cheapskates. Others tried to play semantics over what defense spending even means. And as the confrontations in Munich played out on the stage and in the corridors of the Bayerischer Hof hotel, it became clear that the debate over Europe’s security will get a lot uglier before it gets resolved.

At the head of the U.S. delegation to the conference this year was Vice President Mike Pence, whose speech felt at times like that of a barman politely insisting to a roomful of drinkers that happy hour is over. He reminded the European leaders in the audience that, out of 28 members of the NATO military alliance, only four countries other than the U.S. currently meet their obligation to spend at least 2% of their GDP on defense. (These are Greece, Estonia, Poland, and the U.K. On its own the U.S. spends around $650 billion per year, or roughly 3.6% of its GDP. That accounts for more than 70% of the total defense spending of all the NATO allies.)

“Let me be clear on this point,” Pence said. “The President of the United States expects our allies to keep their word, to fulfill this commitment. And for most, that means the time has come to do more.” A burst of applause broke out at this point from the American delegates in the audience. But the Europeans mostly took the remark with blank expressions, and German Chancellor Angela Merkel did not feel the need to clap.

Instead, Merkel went on to argue that mutual security went beyond military spending — that, for example, some types of development aid should count as defense spending, in effect equating the construction of hospitals in Africa to the stockpiling of ammo in Europe. “When we help people in their home countries to live a better life and thereby prevent crises, this is also a contribution to security,” Merkel said from the stage in Munich on Saturday. “So I will not be drawn into a debate about who is more military-minded and who is less.”

In fact, few in the alliance are less military-minded than Germany, largely due to its disastrous history of militarism in the first half of the 20th century. Since then, Germany’s defense policy has been shaped by a simple and laudable credo: Never again. But the national commitment to pacifism has become hard for Europe’s largest economy to defend. Its military has been deliberately stunted, and it is seldom willing or able to take on any combat missions, opting instead to offer rearguard support while Germany’s allies carry the brunt of the fighting.

So the idea that Germany, or any other NATO member, could pad its defense budget by spending more on international development did not sit well with Jens Stoltenberg, the Secretary General of the alliance. “It’s not either development or security,” he told TIME in an interview on Saturday in Munich. “We need both.”

Asked about Merkel’s suggestion that one type of spending could count toward the other, Stoltenberg pointed out that the United Nations already has a spending goal for international development – 0.7% of GDP. But that’s not the same thing as NATO’s 2% requirement for spending on defense. And splurging on one would not compensate for skimping on the other, Stoltenberg suggested. “When we live in more challenging times, we need to invest more in defense.” The NATO chief also challenged Merkel’s argument that development aid could help bring about peace and security in conflict zones. “Actually,” he says, it’s the other way around: “We need peace and security to facilitate development.”

Though the debate may seem pedantic, it points to some fundamental disagreements over the threats that Europe is facing. Along NATO’s eastern flank, countries like Poland and the Baltic States are most concerned about the threat from Russia, whose military keeps tank formations and missile batteries primed along its borders with NATO. But those threats feel a lot more remote when seen from Germany, which is more concerned about the risk of refugees flooding into Europe from faraway conflicts in the Middle East and Africa.

This difference in perspective led to some heated exchanges in Munich. After German Foreign Minister Sigmar Gabriel offered a version of Merkel’s argument for development aid as a form of defense spending, he got a blunt reply from Artis Pabriks, the former defense minister of Latvia, a NATO member that borders Russia. “For me, as a Latvian,” he said, “it sounds a little bit bitter that support for my borders and the security of my country will be challenged because some other European nations will not pay their share.”

Gabriel, who also serves as the vice chancellor in Merkel’s government, responded with some choice statistics. Germany would need to spend an extra 25 billion euros ($26.5 billion) on defense over the next few years in order reach its 2% commitment to NATO. Yet the country is already spending 30-40 billion euros per year on the cost of sheltering Syrian, Iraqi and Afghan refugees, “which are flooding into our country because military interventions some years ago went terribly wrong,” Gabriel said.

It was an unusually pointed rebuke against the U.S., the United Kingdom, France and other NATO allies whose military interventions have caused havoc in many parts of the Middle East and Northern Africa. “If we take in these [refugees], integrate them, and prevent them from going to other parts of the world as foreign fighters, that is also part of the debate that we must have,” said Gabriel.

It’s sound logic, but it likely won’t let Germany avoid the need to play a much bigger military role in the years to come. On the sidelines of the conference in Munich, some German politicians admitted as much. “We have to prove to be reliable,” Norbert Roettgen, the chairman of the foreign affairs committee in the German parliament, told TIME. “We must not outsource, after the end of the Cold War, the care and concern for European security.”

In trying to meet the demands of NATO allies, Roettgen has proposed a compromise. He wants to increase the German defense budget slowly, by about 3 billion euros per year, or 0.1% of GDP. But even if he would be able to get the German government and parliament to approve that proposal, it would still take at least another eight years before the country reaches the 2% benchmark.

That isn’t likely to satisfy President Trump. During the first meeting of NATO defense ministers since Trump took office, his new Defense Secretary James Mattis issued a warning to the Europeans: the U.S. would be “moderating” its commitment to Europe’s defense, he said, if NATO allies don’t increase funding by year’s end. “Americans cannot care more for your children’s future security than you do,” Mattis told his European counterparts in Brussels on Wednesday.

If this was a threat, it sounded a lot milder than the ones Trump hurled at NATO in the past. During his campaign for the presidency, he warned that if European allies don’t “reasonably reimburse” the U.S. for the costs of defense, they should expect to be told, “Congratulations, you will be defending yourself.” In an interview shortly before his inauguration, he suggested NATO might be “obsolete.”

Those remarks caused a lot of alarm on the Continent. But they also urged the Europeans to band together in outrage at Trump’s disregard for the core NATO principle of mutual defense. Over the past few days, the message they got from Mattis and Pence caused a different reaction. It made the Europeans look closely at one another, and at their pocketbooks, before starting to quarrel among themselves.

Contact us at editors@time.com.

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