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NATO's paradox ahead of upcoming summit - Reuters

As reported by Reuters, NATO's alliance will be holding a two-day summit from Wednesday, and the treaty organization faces a bizarre paradox where they remain united against Russia's Putin, but continue to be pulled apart by the US President Donald Trump.

Key quotes

"Accusations that Russia is trying to destabilize the West with cyber attacks and covert action have laid the ground for the North Atlantic Treaty Organisation’s biggest expansion for decades, backed by a surge in U.S. defense spending in Europe.

NATO is also set to expand again, inviting Macedonia to start accession talks and defying Russian warnings against enlargement of the U.S.-led bloc deeper into the Balkans. But Trump’s comments about many allied governments not paying their way in the alliance in exchange for the U.S. umbrella has thrown many summit leaders on the back foot.

“NATO has not treated us fairly ... We pay far too much and they pay far too little,” Trump said as he left the White House on Tuesday for his trip to Europe, which will also take him to Britain and Finland, where he will meet Russia’s Vladimir Putin.

But unlike his recent tweets in which he berated allies, Trump struck a more affable tone in person before taking his flight: “We will work it out and all countries will be happy.” Trump may seek to take credit for the increases in European spending that are now registering in government accounts. NATO agreed in 2014 that each member would boost military spending to 2 percent of its gross domestic product by 2024. Now, cumulative expenditure by Europe and Canada has risen by almost $90 billion since 2015.

“Allies can take a little criticism if it comes with a recommitment to the U.S. security guarantee, but if Trump threatens to withdraw from NATO, then that could be very difficult,” said a NATO diplomat involved in the preparations."

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Joshua Gibson

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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