NATO leaders, including prominent figures like President Trump and Prime Minister Keir Starmer, recently convened for a critical summit focused heavily on boosting collective defence spending. Amid discussions pushing for a potential radical increase to a 5% of GDP target, a significant challenge remains: nearly a third of the alliance’s members failed to meet the existing, less ambitious goal of spending 2% of their economic output on defence in 2024.
According to the latest NATO estimates, nine member states did not reach the 2% threshold last year. This shortfall highlights a persistent spending gap across the alliance at a time of heightened geopolitical tension, particularly concerning the threat from Russia.
NATO’s Spending Challenge: A Third Fall Short
While the alliance collectively increased its defence expenditure, nine countries did not meet the 2% target in 2024. Among them, Spain registered the lowest spending rate at just 1.2% of GDP.
This has drawn sharp criticism, notably from President Trump, who has publicly labelled Spain as “notorious” and a “very low payer,” asserting that all allies “has to pay what everybody else has to pay.” Other nations that missed the 2% mark in 2024 included Canada, Italy, and Belgium, although the exact number cited in reports has varied slightly.
Analysis suggests a geographical divide in defence investment. Allies situated closer to the perceived threat from Russia in Northern and Eastern Europe tend to spend more generously. Conversely, nations further south often demonstrate lower spending levels.
Understanding the 2% Target
It’s crucial to understand that the 2% of GDP target, agreed upon in 2014, is not legally binding. There is no international court or formal mechanism to penalise defaulting nations. This means that the primary tool for enforcement is political pressure.
This pressure has been particularly forceful from the United States, historically the alliance’s largest contributor. President Trump has been outspoken, recounting instances where he suggested he might not protect nations behind on their spending commitments, even going so far as to say he would “encourage” aggressors to “do whatever the hell they want” to countries not meeting targets. More recently, he has stated explicitly that the US is “not going to defend” NATO members missing spending goals, adding, “If they don’t pay, I’m not going to defend them.”
Experts agree that while Trump’s approach is unconventional and sometimes controversial – even described as a “kick in the pants” by former officials – it has undeniably focused minds across the alliance. As one former NATO official put it, “Nobody wants to be called a bad ally for failing to meet the target.”
The Impact of Pressure: Are Allies Stepping Up?
Despite nine countries missing the mark in 2024, there is clear evidence that political pressure, coupled with the geopolitical realities amplified by Russia’s actions in Ukraine, is driving increased defence spending.
Every NATO country, even those below the target, increased their defence spending between 2014 and 2024. Furthermore, the combined defence spending of NATO members, excluding the US, rose significantly from 1.4% of GDP in 2014 to reach the 2% target collectively in 2024 – a notable achievement for the European and Canadian allies as a bloc.
Nations Racing to Meet 2%
While they didn’t hit the 2% target in 2024, several of the nine nations are accelerating their plans to meet the commitment soon.
Spain, despite being the lowest spender at 1.2%, has seen a shift in domestic perception. After years where the military’s role was seen more for natural disaster response, things are “changing very fast” due to the altered security landscape. Prime Minister Pedro Sánchez has pledged Spain will surpass 2% in 2025, potentially reaching 2.1% by the end of 2024 according to some reports.
However, Spain remains resistant to the proposed 5% target, which Sánchez has described as “incompatible with our worldview.” Analysts concur, with one calling 2% acceptable but 5% “crazy.” Spain is also advocating for a greater focus on “smart procurement” and enhancing military capabilities rather than simply fixating on the total amount of money spent, arguing that efficiency could achieve alliance goals without such massive hikes.
Beyond Spain, several other allies are also speeding up their timelines:
Canada, which spent 1.5% in 2024, initially aimed for 2% by 2030, but has now committed to reaching it by March of next year.
Belgium, at 1.3% last year, announced an extra €4bn (£3.4bn) this year, aiming to reach 2%.
Portugal (1.5% last year) plans to hit 2% this year, four years earlier than originally planned.
Italy (1.5% in 2024) also expects to reach the 2% target this year.
This rapid acceleration by multiple countries indicates the significant impact of recent pressure and the recognition of increased security needs.
Looking Ahead: The Controversial 5% Goal
The most significant point of discussion at the recent summit was the push for a new, much higher target of 5% of GDP for defence and related spending. This ambitious figure, reportedly demanded by President Trump, aims to ensure allies are truly capable of countering modern threats.
A proposal is circulating to split the 5% target into 3.5% for core defence spending and 1.5% for defence-related areas like infrastructure or cyber security. This split brings the headline ‘core’ figure closer to the US’s current spending percentage, potentially offering a psychological landmark. However, the definition of “defence-related” expenditure is viewed by some critics as potentially vague, opening the door to “creative accounting.”
Achieving 5% requires finding billions more dollars, presenting tough political choices between “guns or butter” – increasing taxes, borrowing, or cutting welfare spending. Many European governments are seen as having not adequately prepared their electorates for these trade-offs, raising the risk of political instability in some nations, such as Spain.
There is also significant debate over the timeline. While some allies suggest 7-10 years to reach such a target, NATO’s Secretary General Mark Rutte has warned this may be too late, given estimates that Russia could pose a significant threat to a NATO country within five years. Spain’s prime minister has also called the accelerated timeline for the new target unreasonable.
Beyond the Percentage: Capabilities and Leaders
While the focus is often on the 2% or 5% percentage, the underlying goal is to ensure NATO possesses the necessary capabilities to deter and defend. NATO’s secret defence plans reportedly reveal significant capability gaps that must be addressed, including a need for a 400% increase in air and missile defences, thousands more armoured vehicles and tanks, and millions more artillery shells.
Several countries are already leading the way in defence spending as a share of their economies:
Poland was the top spender in 2024 at 4.1% of GDP, reportedly aiming to build Europe’s most powerful land army.
Estonia and Latvia both spent 3.4%.
- The United States spent 3.2% of its GDP on defence in 2024, though this figure has declined since 2014 (3.7%). In cash terms, the US remains the undisputed leader, spending $935 billion in 2024 – nearly double the defence spending of the rest of NATO combined.
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To address capability gaps, nations like Sweden and Germany are planning significant increases in troop numbers, acknowledging the need for more robust forces, particularly near critical areas like the border regions with Russia.
The Political Landscape: Trump’s Influence and Alliance Dynamics
The recent NATO summit was widely seen as carefully orchestrated to appease President Trump, focusing narrowly on the issue of defence spending increases. Discussions on potentially contentious topics, such as a new Russia strategy or detailed debates on the war in Ukraine, were reportedly muted or removed from the main agenda to avoid “schism” with the former, and potentially future, US president.
Trump’s stance that US defence is conditional on allies meeting spending targets has fundamentally challenged the alliance’s core principle of collective defence (Article 5). While European allies dislike his methods, the imperative to keep the United States engaged – with its vast military might, nuclear arsenal, and crucial capabilities like intelligence, surveillance, air force assets, and command structures – compels them to increase spending. Replacing these vital US assets if they were withdrawn would be a lengthy and difficult process.
The summit represents a potential watershed moment, marking a turning point where Europe begins to shoulder significantly more responsibility for its own security, potentially moving towards spending levels comparable to the United States in the future.
Conclusion: Navigating the Future of NATO Defence
While nine NATO countries missed the 2% defence spending target in 2024, the overall trend is towards increased investment, driven by geopolitical realities and intense political pressure from the US. Many nations previously below the threshold are now accelerating their efforts to meet the 2% commitment in the very near future.
However, the discussion around a new, much higher 5% target presents considerable challenges. Questions about definition, feasibility, timeline, and the political will to make necessary budget trade-offs remain. As NATO grapples with addressing critical capability gaps and ensuring readiness against evolving threats, the path to dramatically higher defence spending across all members is clear, but it will require navigating significant economic, political, and strategic hurdles.
