Iran will be high on the agenda at the NATO summit, but its main focus is expected to be on a massive increase in defense spending. The agreement is set to please US President Donald Trump.

Much of the attention at this week’s NATO summit in The Hague will likely be on US President Donald Trump, following the US strikes on Iran’s nuclear sites over the weekend.

But ramping up defense spending, a major demand by Trump and his administration since day one, will also be in the spotlight. This goal has become potentially acceptable to almost all NATO countries thanks to the persuasive power of Secretary-General Mark Rutte, particularly after Germany, the biggest European economy, threw its weight behind it.

Officials at NATO told DW that it’s about giving Trump a win but also “about rebalancing in the alliance,” as one senior diplomat put it, stressing that if that’s achieved, the summit would be a resounding success.

Lessons from the G7 in Canada

“Hopefully, Trump is not going to leave early like he did from the recent G7 meeting in Canada,” Jamie Shea, a former NATO official, told DW. This worst-case scenario is a big concern for some NATO allies and something they want to avoid at any price.

Shea said he thinks “it’s important for Trump to be there to learn about all of the good things that NATO is doing at the moment, which help America’s security and not just Europe’s security.”

The goal of spending 5% of GDP on defense, expected to be approved at the summit in The Hague this week, is highly ambitious, and has the potential to transform societies in Europe. In many EU countries, social justice and economic stability were the clear priorities for national governments for decades; in the future they might concentrate on strengthening military power and becoming more independent from the United States.

This scenario has led to growing resistance in some parts of Europe. Spain had been against the measure, but ultimately dropped its opposition on Sunday after a deal was reached for it to be exempt.

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How to deter Russia from attacking NATO territory

Asked about how he would explain his plan to citizens in Europe who are against social cuts in favor of new weapons, Rutte recently said leaders need to act now because “otherwise, four or five years from now, we are really under threat and then you have to get your Russian language course or go to New Zealand.”

Rutte’s idea is to cut the cake into two pieces and to allocate 3.5% of GDP to core defense needs and 1.5% to security-related investments. These investments include building broader roads and bridges that could carry heavy weaponry but also upgrades on cybersecurity, measures against hybrid attacks, civil protection and aid for Ukraine.

Members of the alliance will try to factor in what they are already spending, for instance, on infrastructure, diplomats at NATO acknowledge. But they also stress that the fact that allies were able to agree on the exact definition of the 1.5% target is already a significant success.

Spain wants an exemption

The biggest challenge is getting everyone on board with the 3.5% target for core military spending. Spain, which has the lowest military spending in the alliance, signaled prior to the summit that it wanted a carve-out.

Other nations, like Italy, are demanding more time than the proposed seven years to meet the obligation. Many NATO members are ready to spend more but refuse to commit to yearly plans — a kind of control mechanism — also proposed by Rutte.

In the end, it comes down to NATO’s credibility, Lithuania’s former foreign minister, Gabrielius Landsbergis, told DW. The alliance “is moving in the right direction,” he said. But like many representatives of the countries on NATO’s Eastern flank in proximity to Russia, he warns against not being serious about fulfilling the new spending pledge. “What if it is just to have a nice summit and everyone leaves happy, and then nothing really happens?”

A disappointing summit for Ukraine?

In addition, many Europeans are unhappy about the apparent lack of any ambition when it comes to Ukraine. While Ukrainian President Volodymyr Zelenskyy has been invited to the summit, his aspirations to join NATO are unlikely to take center stage at the summit or be prominently featured in the final declaration

President Volodymyr Zelenskyy’s aspiration for his country to become a member of the alliance is unlikely to dominate the summit Image: Ludovic Marin/AP Photo/picture alliance

“Clearly, the United States in particular has wanted to play it down,” explained former NATO official Shea. “So, for Ukraine, it is going to be a rather disappointing NATO summit.”

There will be a sentence or two as a reference to Russia as a threat in the final document, NATO sources told DW, but no new tough language, given the ongoing US attempts to get both countries to the negotiating table.

It’s all about Russia

Kristine Berzina, a NATO expert with the German Marshall Fund think tank, said it’s important to look at the bigger picture.

“We get so obsessed with the little declarations and paragraphs about such and such,” she told DW. What really matters is that “NATO is a strong political alliance and the people at the table believe in each other.” That is what she expects to be the summit’s strong message.

“Of course, it is about Russia. Talking about the ambitious new steps they’re going to take is a signal to Russia,” Berzina said.

Still, the summit declaration is expected to be “short and crisp,” as one diplomat put it, and the event is deliberately planned as a brief exchange not to bore Trump, who’s known for not being a fan of long speeches by others, and of multilateral organizations in general.

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A recipe to keep Trump happy

The big risk is that, with the escalation of the conflict in the Middle East, Trump may not travel to The Hague at all, according to media reports in the US. At NATO HQ in Brussels, diplomats have so far said they do not have any indication that Trump won’t be there.

So, is the NATO summit just about pleasing Trump, as the program, including a dinner with the Dutch king, an invitation to play golf in the Netherlands and the expected big spending splash, indicates?

In the end, it’s about the Europeans, said Shea. “The 5% of GDP for defense spending is to deter Russia, to keep Europe and NATO citizens safe, sleeping soundly in their beds at night.” But he also admitted that “provided the decision on the 5% is taken, Trump should go back to Washington a happy man.”

Edited by: Rob Mudge

Specter of war: Are Europeans really ready to rearm? To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video

Update, June 23, 2025: This article has been updated with the latest on Iran and the 5% defense spending goal.

“The advantage of American leadership is that it was so superior, massive and benevolent that no one could dispute it: It brought order to the playground, there was no question of who decided,” said a high-ranking French military officer.

In a situation where Washington isn’t the driving force behind either NATO or European security, “there would no longer be a true alpha male,” the officer added. “No one else can assert its predominance by force.”

POLITICO and WELT, a sister publication of POLITICO in the Axel Springer Group, spoke to more than a dozen current and former European and American policymakers, military officers and academics about what NATO and European security would look like with a lesser role for America.

While all insisted that the U.S. is unlikely to actually pull out of NATO, there’s a broad agreement that the military alliance is going to have to change — and that could push other countries into taking on more of a leadership role.

In the meantime, allied leaders will be tiptoeing around Trump in The Hague to ensure he leaves happy.

“Instead of hoping that the U.S. would remain in Europe and confirm its pledge to mutual defense, which might happen, we have to think about how it would work if, for one reason or another, the U.S. is not there or not in the way that we expected it to be,” warned Lithuania’s former Foreign Minister Gabrielius Landsbergis.

On Wednesday, NATO leaders are expected to formally agree to a new defense spending target of 5 percent of gross domestic product — a sharp increase from the current 2 percent benchmark and something that Trump has been demanding for months.

While NATO Secretary-General Mark Rutte has insisted publicly that the new objective is not designed “for an audience of one,” a private, obsequious message leaked by Trump himself highlights that the gathering’s choreography is mostly designed to provide the U.S. president with a win and to keep him from abandoning the alliance.

“Donald, you have driven us to a really, really important moment for America and Europe, and the world. You will achieve something NO American president in decades could get done,” Rutte wrote, according to a screenshot posted by Trump on Truth Social. “Europe is going to pay in a BIG way, as they should, and it will be your win.”

The NATO secretary-general also congratulated the U.S. president for his “decisive action in Iran.”

Trump also said he spoke to Russian President Vladimir Putin.

Asked aboard Air Force One about the ongoing exchange of long-range missile fire between Iran and Israel, Trump revealed a recent call with the Russian leader and that he was still looking to strike a deal with the Kremlin boss on ending the war in Ukraine.

NATO Secretary-General Mark Rutte on Monday urged allies to massively increase defense spending and build more weapons, as he warned that Russian President Vladimir Putin could launch an attack by 2030.

“Russia could be ready to use military force against NATO within 5 years. Let’s not kid ourselves, we’re all on the eastern flank now,” Rutte said in a speech at Chatham House in London, referring to the range of Russian missiles.

“The fact is, we need a quantum leap in our collective defense. The fact is, we must have more forces and capabilities to implement our defense plans in full. The fact is, danger will not disappear even when the war in Ukraine ends,” he added.

The NATO summit takes place in The Hague on June 24-25.

The U.S. has pushed allies to sharply increase their defense spending to 5% of GDP.

Some member states say they’re happy to do that, others are clearly not, and still don’t meet the 2014 target to spend 2% of GDP on defense.

Fireworks could kick off during NATO’s annual summit this week, as the U.S. pushes its allies to sharply increase their defense spending to 5% of their gross domestic product (GDP).

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The 5% figure is made up of 3.5% of GDP that should be spent on “pure” defense, with an extra1.5% of GDP going to security-related infrastructure, such as cyber warfare capabilities and intelligence.

While member states say they’re happy to hit that milestone, and some countries are not too far off that mark, others don’t even meet the 2% threshold that was agreed over a decade ago.

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While they might pledge to increase defense spending, whether these promises materialize will be the key question.

Talk is cheap and timelines can be vague — but concerted action is what the U.S. and President Donald Trump, who’s attending a NATO summit for the first time since 2019, will want to see.

NATO members on Sunday agreed in principle to a big increase in their defense spending, Reuters reported, but Spain has already pushed back.

After diplomats on Sunday agreed on a compromise text pertaining to the spending rise, Spanish Prime Minister Pedro Sanchez said Spain would not have to meet the 5% target as it would only have to spend 2.1% of GDP to meet NATO’s core military requirements.

“We fully respect the legitimate desire of other countries to increase their defense investment, but we are not going to do so,” Sanchez said in an address on Spanish television, according to the news agency.

Christian Hartmann | AFP | Getty Images

“The U.S. is looking for everybody to say, ‘Yeah, we mean it. We have a plan. 5% is real. We’re going to get there’,” Kurt Volker, former U.S. ambassador to NATO and distinguished fellow at the Center for European Policy Analysis (CEPA), said Wednesday.

“But one thing to watch for is if the messaging is actually on point. Some of the messaging from some of our European allies, at least when they back brief their own media and their own parliaments is, ‘Yeah, 5% but it’s really 3.5% and 1.5%, and that can be pretty much anything’ … So there’s going to be a whittling down [of defense spending pledges] almost immediately,” Volker noted at a CEPA briefing ahead of the NATO summit.

“And if that is over emphasized, you’re going to have a clash with the U.S.,” Volker added.

High stakes, low expectations

The stakes are high as allies meet in The Hague in the Netherlands on June 24-25, given ongoing conflict in Ukraine and war in the Middle East threatening to destabilize the global economy.

Defense analysts say this year’s meeting could be the most consequential in the alliance’s 77-year history, with the U.S.’ spend-pushing heavily forewarned before the summit.

U.S. Defense Secretary Pete Hegseth was emphatic as he said 5% “will happen” at a separate NATO gathering earlier this month, with NATO Secretary General Mark Rutte also widely plugging that message to allies too.

Petras Malukas | Afp | Getty Images

Defense spending has been a thorny subject for NATO members for years, and a persistent source of annoyance and anger for Trump, who was demanding that allies double their spending goals from 2% to 4% of GDP all the way back in 2018.

NATO defense expenditure has nevertheless sharply picked up among NATO members since Trump was last in power.

Back then, and arguably at the height of the White House leader’s irritation with the bloc, only six member states met the 2% target, including the U.S. Times have changed, however; by 2024, 23 members had reached the 2% threshold, according to NATO data.

While some greatly surpassed that target — such as Poland, Estonia, the U.S., Latvia and Greece — major economies including Canada, Spain and Italy have lagged below the contribution threshold. No NATO member has so far reached the 5% spending objective, and some are highly likely to drag their feet when it comes to getting to that milestone now.

Dirk Waem | Afp | Getty Images

The U.K., Poland and Germany have already said they intend to increase defense spending to the requisite target, but their timeline is unclear. The UK is also reportedly trying to delay the spending rise among by three years, according to the i newspaper. CNBC has reached out to Downing Street for comment.

Spain and Italy are seen as major holdouts against the 5% target, after only committing to reach the 2% threshold in 2025. Canada meanwhile spent 1.3% of GDP on defense in 2024, NATO estimates suggest, even less than Italy, Portugal or Montenegro.

Spending 5% on defense is a target, but not a given, Jason Israel, senior fellow for the Defense Technology Initiative at CEPA, said Wednesday.

“Every single country … is trying to figure out how they’re going to thread that needle of being able to make the commitment, but also make the accounting work when every single nation has to make trade offs against what is generally unpopular, massive increases in defense spending,” he noted, stressing it’s a “long way from commitments … to actual capability,”

Europe must commit

European aerospace and defense companies are following NATO spending commentary and commitments closely, but say they’re stuck in limbo between pledges and action by way of concrete government procurement.

The leaders of Leonardo, Embraer and Saab told CNBC last week the continent needs to act decisively and collectively to make long-term commitments to defense spending and investment contracts to enable companies like theirs to scale-up their production capacity and manufacturing capabilities.

“If we go for 3.5% [of pure defense spending] across the European part of NATO, that will mean a lot, and more will be needed in terms of capacity. But we need to understand the capability targets better,” Micael Johansson, the chief executive of Swedish defense company Saab, told CNBC.

“We can do more, and I think we need to come together in Europe to create more scale, also in what we do to align demand, align requirements, so we can actually be competitive player in internationally. So there’s a lot to do still,” he said.

Roberto Cingolani, CEO of Italian defense firm Leonardo, agreed that “there’s a lot of work to be done.”

“Leonardo has a capacity boost program at the moment because we are quite aware of the fact that we have to increase the production of specific platforms, defense systems, electronics and technology solutions. It is not only matter of money, it’s matter of priority. It’s matter of reducing the fragmentation among countries in Europe,” he told CNBC’s Charlotte Reed at the Paris Air Show.

Defense companies needed to know what will be expected of them ahead of time, Cingolani said, given the complex nature of global supply chains that underpin the defense industry.

“We have approximately 5000 companies in the supply chain, and we are in 160 countries in the world. So it’s very complicated,” he noted. “You have to invest in supply chain. You have to make investments. You have to protect the supply chain. But of course, we also have to face a shortage of raw materials … There is no no simple solution. If there were a solution, we would have done it already,” he said.