NATO Allies Agree to 5% Defense Spending Goal
On Wednesday, June 25th, NATO allies - in arguably the most decisive move from the alliance in more than a decade - agreed to increase their defense spending target from 2% of gross domestic product to 5% by 2035.
In a joint declaration, the Western military alliance stated it was committed to addressing significant security threats, particularly those posed by Russia and terrorism. "Allies commit to invest 5% of GDP annually on core defense requirements as well as defense-and security-related spending by 2035," the statement read. The 5% target includes at least 3.5% for pure defense, with the rest allocated to security and defense-related infrastructure.
NATO members will need to submit annual plans showing a credible path to reach this goal, with the overall 5% spending plan to be reviewed in 2029. This decision follows pushback from some member states, including Spain, which have yet to meet the previous 2014 target of 2% of GDP on defense. The move comes amid tensions in the Middle East and the ongoing conflict between Ukraine and Russia. It also follows continued pressure from the U.S. for European allies and Canada to increase their share of collective defense expenses.
The alliance, which met for the first time this year in the Netherlands, also reaffirmed its commitment to collective defense as established in Article 5, which considers an attack on one member as an attack on all. Addressing the summit, NATO Secretary General, Mark Rutte, described the agreement as a significant advancement for the alliance’s collective defense. “This is a quantum leap that is ambitious, historic and fundamental to securing our future," said Rutte. He noted that the deal would enhance security and create jobs, while acknowledging the severity of current threats.
During the summit, U.S. President Donald Trump reiterated his commitment to NATO but stressed that European allies and Canada must contribute more. Rutte expressed trust in the U.S. commitment to the pact and stated that the specifics of when Article 5 would be triggered would not be detailed. Rutte also emphasized that the effort to boost defense capabilities must continue, highlighting the importance of innovation and swift action to increase weapons stockpiles.
At the moment, “there is not nearly enough supply to meet our increased demand on either side of the Atlantic,” he added. “For this, we need to work closely with industry, the major players that are the foundation of our defense industrial base, as well as the newer players that will help as we innovate and ensure our technological edge going forward.” Rutte stated he believed Spain was serious about meeting the 3.5% target, despite earlier concerns.
Spanish Prime Minister, Pedro Sanchez, had threatened to derail the summit claiming Spain could achieve its targets by spending just 2.1% of its GDP. Slovakian Prime Minister, Robert Fico, similarly stated that Slovakia reserves the right to determine the pace and extent of its defense budget increases, claiming the country could fulfill the alliance's requirements without increasing spending to 5%.
Spain was given an exemption by NATO to avoid having to meet the higher spending goal. Following the summit, Spain remarked that the new spending target and 2035 deadline were “unreasonable.” Belgium signaled that it would not get there either, and Slovakia reiterated that it reserves the right to decide its own defense spending. Other European nations are encountering significant economic difficulties, with the United States' global tariff policies posing further obstacles for its allies in achieving their objectives. Some countries are already reallocating funds from welfare and foreign aid budgets towards military expenditures. NATO countries notably started to cut their military budgets after the fall of the Berlin Wall in 1989.
Finnish President, Alexander Stubb, said that the agreement, “is a big win, I think, for both President Trump and I think it’s also a big win for Europe.” Stubb told reporters, “We’re witnessing the birth of a new NATO, which means a more balanced NATO.” U.K. Prime Minister, Keir Starmer, declared, “This is the moment to unite, for Europe to make a fundamental shift in its posture and for NATO to meet this challenge head-on.”
Notably, additional funding will be required by European members to address any resulting security shortfalls, should the Trump administration go ahead with a reduction of forces in Europe, where approximately 84,000 U.S. troops are stationed. The Pentagon is anticipated to disclose its plans in the coming months.