The Members of Europe and NATO now have a major financial and strategic burden in the wake of the historic 2025 NATO Summit in The Hague, in which the defence spending level was agreed to be increased to 5% of GDP by 2035. This is a dramatic escalation from the previously supported 2% target, broken down into at least 3.5% for core defence needs (troops, weapons, operations) and as much as 1.5% for more expansive defence- and security-related outlays, such as cybersecurity, infrastructure resilience, and defence industrial base development.
The obligation is clearly not welcome by the NATO-European countries. Their super infrastructure and sophisticated standard of living, at the cost of guard-work by the US stops now. It seems they will be billed for their own security, something they weren't apparently ready for or used to.
The pledge is designed to show solidarity, common burden, and determination in preventing danger, mostly from Russia, in the face of a more uncertain global environment. The commitment is a strategic shift towards increasing military readiness and operational capacity within NATO, effectively doubling conventional defence spending targets from previous decades.
Member states are making slow progress towards realising this ambitious commitment. 22 of the 32 NATO nations had met or surpassed the old 2% benchmark by 2024, and some nations such as Poland already spend more than 4% of GDP on defensc. Nevertheless, there are still significant gaps: Spain and Italy, for instance, spent much less than 2%. Spain has successfully lobbied for an exemption to the 5% goal, planning to stick at about 2.1%, while other holdout states have raised concerns over fiscal affordability. Large economies are subject to serious budgetary limits in light of high public indebtedness; Germany recently raised its constitutional debt break to meet higher spending, but others such as France and Italy are struggling with negative credit prospects and sustainability issues.
For oversight and persistent improvement, NATO has set a formal review of members' defence expenditure patterns in 2029, with complete compliance by 2035. Periodic yearly reporting will monitor investments and quality of expenditure, in addition to totals, looking at the efficiency and investment of tax payers' money into improving military capacity, infrastructure, innovation, and resilience.
The rising expenditure commitment also has risks, including the likelihood of speeding up arms races and undermining diplomatic efforts at conflict resolution. Critics cite the potential for putting a strain on national budgets and urge restraint in the face of international economic uncertainties and rising social demands. However, supporters, led by the United States—see this commitment as necessary to correct long-standing imbalances in security burdens in NATO and to enhance collective defence.
The Northern and Eastern European countries, as well as the Netherlands, have made plans for meaningful defence spending increases earlier than 2035, with targets set by 2029 or before. In contrast, other Western European nations still argue over both the speed and magnitude of the increases amidst domestic political and budget limitations.
Overall, NATO's new 5% of GDP defence target can be a turning point for European security and transatlantic alliances. The mid-2025 progress report presents an alliance working to keep pace with unprecedented budgetary and strategic challenges but confronted with intricate economic realities and political horse-trading. How the member states overcome these obstacles will define Europe's defence landscape and the cohesion of NATO for decades to come.
