NATO allies have reached a consensus on a new defense spending goal, establishing a target of 5 percent of their gross domestic product (GDP). This agreement, aimed at enhancing collective defense capabilities, allows Spain some leeway to spend less than the target. The decision will be confirmed during the NATO leaders’ summit scheduled for Wednesday in The Hague.
Spain’s unique position within NATO
The initiative for a 5 percent spending target originated from former U.S. President Donald Trump, and it faced complications from Spain as Prime Minister Pedro Sánchez sought an exemption from this significant increase from the existing 2 percent target. This exemption request came as a surprise just before the summit, highlighting Spain’s ongoing struggles to meet the current standard.
To accommodate Spain’s demands, the NATO leaders adjusted the phrasing of the commitment from “we commit” to “allies commit,” offering Spain more flexibility in its defense budget. As long as Spain meets NATO’s updated capability benchmarks, which were ratified by defense ministers in early June, it can determine its own spending trajectory.
“Each NATO member … has the right and the obligation to choose whether or not to assume those sacrifices, and we as a sovereign country choose not to do so,” Sánchez stated, emphasizing Spain’s commitment to the alliance while maintaining its fiscal priorities.
Understanding NATO’s new spending framework
In a statement, Sánchez characterized the agreement as a “success,” allowing Spain to uphold its responsibilities to NATO without the immediate necessity to raise defense spending to 5 percent of GDP. He further noted that Spain plans to allocate 2.1 percent of its GDP to defense, aimed at fulfilling personnel and equipment requirements as outlined by NATO.
NATO Secretary-General Mark Rutte reaffirmed Spain’s position, stating that the forthcoming NATO Summit agreement would enable Spain to navigate its sovereign path towards meeting the Capability Target goal, while retaining the autonomy to draft its annual financial plans accordingly. Rutte also mentioned that a review of NATO’s spending trajectory is scheduled for 2029.
As part of this agreement, allies are expected to allocate 3.5 percent of GDP to direct defense measures such as military personnel and equipment, alongside an additional 1.5 percent for defense-related investments, including cybersecurity and mobility operations. Notably, the 5 percent goal will not be applicable to the United States.
The timeline for achieving this target extends to 2035, a timeline that many countries, such as Italy and the United Kingdom, welcome to avoid sudden fiscal pressure. However, nations closer to Russia are advocating for a more accelerated attainment by 2030, with some proposals suggesting a 2032 deadline.
Given NATO’s consensus-based structure, where each of the 32 member countries holds a veto, Sánchez defended Spain’s position, asserting that its request for flexibility was not a challenge to the alliance’s unity. He labeled the proposed increase in defense spending as “disproportionate and unnecessary,” expressing concern that it could detract from vital social spending within Spain.