It should be noted that in addition to the amounts shown in the table the country in which the installations are located contributes the land which in general averages in value about 10 percent of the cost of the installation and the utilities which add another 5 percent.

7. Relation of European defense expenditures to United States contribution

The United States is by no means paying the entire military bill for Europe. In fiscal year 1954 the authorization that this bill provides is $2,079,698,870 for military equipment for Europe. Europe plans to spend during the same period $14,930,000,000 on its own defense.

The following table gives a summary of European defense expenditures:

The chart on page 307 shows the division of the defense expenditures of the European countries divided into major categories. It should be noted that expenditures for major materiel (weapons, etc.) have received a larger share in the last 2 years, indicating an increasing ability on the part of Europe to arm itself. The relation of defense expenditures to the gross national product in certain European countries is shown in the chart on page 308.

The relationship of total budget expenditures to defense expenditures and the gross national product is indicated in the chart on page 309.

The relative tax burdens of various countries participating in the defense program are set forth in the following table:

1 Ratios computed at legal rates of exchange, hence do not accurately reflect differences among countries in purchasing power.

A tabular presentation of the trend of defense expenditures of the United States and other NATO countries is on page 310.

• Total defense expenditures for Germany in fiscal year 1954 are estimated at $2.8 billion, with $1.9 billion in this category. In prior years represent occupation and national coste and allied troop support.

TOTAL BUDGET EXPENDITURES AND DEFENSE EXPENDITURES

AS PERCENTAGES OF GROSS NATIONAL PRODUCT

DEFENSE EXPENDITURES-TOTAL AND PERCENT OF GROSS NATIONAL PRODUCT AT MARKET PRICES

Belgium-Luxembourg..

2.5

158

2.5

201

2.9

355

4.6

469

6.3

510

6.8

France.

7.3

1,458

5.9

2,041

7.0

3,220

9.3

4,007

11.2

4,050

11.1

Germany (Federal Republic) 2.

15.8

1,036

5.1

1, 190

4.9

1,992

6.9

1,952

6.4

2,800

8.6

Italy (including Trieste).

6.0

520

4.0

613

4.2

808

5.1

962

5.8

975

5.7

Netherlands.

2.3

231

4.7

228

4.2

310

5.3

373

6.2

450

7.3

2 Germany: 1938 is for prewar Reich (boundaries as of 1936). Fiscal year 1950 through fiscal year
1954 represents mostly occupation cost.

Austria: Postwar data represent occupation cost and security police. Prewar figure is for 1937.

United States: Preliminary and tentative estimates subject to change as departmental programs are officially submitted to the Congress.

Note.-Precise comparisons of the levels of defense expenditure between the European countries
and the United States are not possible. The conversion into dollars has been made on the basis of
official foreign exchange rates, and the purchasing power of the dollar is appreciably higher in most
European countries than in the United States. Intra-European comparisons of the converted dollar
figures are subject to similar limitations. Adjustments to make the figures truly comparable cannot
now be made.