NATO’s bold defence spending shift: Spain exempt, US sidesteps 5 per cent GDP target

Global defence challenges intensify as NATO members face steep fiscal targets amid US pressure

The Hague: NATO leaders are expected this week to agree that member countries should spend 5% of their gross domestic product on defence. However, the new investment pledge, with its exemptions has already seen Spain reach a deal to be excluded from the 5% spending target, and President Donald Trump has argued that the figure should not apply to the United States but only to its allies.

The 5% target is composed of two parts. Core spending will require pure defence budgets to reach 3.5% of GDP, a significant jump from the current target of at least 2% already met by 22 out of the 32 members, with expenses to arm Ukraine also counting. An additional 1.5% is earmarked for upgrading roads, bridges, ports, and airfields, along with establishing measures to counter cyber and hybrid attacks and preparing societies for future conflict.

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Spain, currently the alliance’s lowest spender, spent 1.28% of its GDP on the military last year, according to NATO estimates. In a Sunday announcement, Prime Minister Pedro Sanchez declared that Spain’s commitment will be met by spending 2.1% of GDP on defence needs. This exemption, reflected in the revised summit communique which will no longer refer to “all allies”, raises questions about potential flexibilities for other members like Belgium, Canada, France, and Italy, who too could face significant challenges in ramping up billions of dollars in security spending. Spain is also among Europe’s smallest suppliers of arms and ammunition to Ukraine, estimated to have sent about 800,000 euros ($920,000) worth of military aid since Russia invaded in 2022.

On Friday, President Donald Trump underscored his view that the U.S. has carried its allies for years and now expects them to step up. “I don’t think we should, but I think they should,” he stated, adding, “NATO is going to have to deal with Spain.” Trump also branded Canada “a low payer,” emphasizing the debate over how the new spending commitment should be applied across the alliance.

The drive for increased defence spending comes amid European fears that Russia’s war on Ukraine poses an existential threat. Moscow has been blamed for a marked rise in sabotage, cyberattacks, and GPS jamming incidents, prompting European leaders to prepare their citizens for further escalation. NATO experts have indicated that defence plans for Europe and North America require investments of at least 3% of GDP, with every member being assigned specific “capability targets.” Spanish Foreign Minister Jose Albares commented that “the debate must be not a raw percentage but around capabilities,” asserting that Spain can reach the organisation’s set capabilities with its commitment of 2.1%.

Beyond the commitment to spend more money, a clear deadline to reach these targets is also under discussion. While many allies have yet to hit the earlier 2% target agreed to in 2014 after Russia annexed Ukraine’s Crimean Peninsula, a deadline of 2032 has been floated as a possibility, a timeline considerably shorter than previous targets. Military planners warn that Russian forces could be capable of launching an attack on an ally within five to 10 years. The U.S. insists that a decade is too long for an open-ended pledge, even as Italy has suggested a 10-year period, and discussions continue about stretching the goal to 2035 or reviewing progress in 2029.