Spain is resisting US President Donald Trump’s demands to hike defence spending to five percent of national output, potentially threatening NATO unity at a crucial alliance summit this month.

The European country ended 2024 as the NATO member that dedicated the smallest proportion of its annual economic output to defence, falling short of the two percent target set in 2014.

Faced with Trump’s threats to withdraw US security guarantees from member states perceived as not pulling their weight, Spain has announced fresh spending to hit the two percent mark this year.

But Madrid is baulking at suggestions the target should rise to five percent as an aggressive Russia, whose invasion of Ukraine has stretched into a fourth year, menaces Europe.

With Germany and Poland already backing the new benchmark, Spain could find itself isolated among its allies at the June 24-25 NATO summit in The Hague.

“Many countries want five (percent), we respect that… but Spain will fulfil those objectives set for us,” Defence Minister Margarita Robles said on the sidelines of a meeting of NATO counterparts in Brussels this month.

“What is really important is that Spain will meet the capacities and objectives” assigned by NATO and “we cannot set ourselves a percentage”, she said.

For Felix Arteaga, a defence specialist at Madrid’s Elcano Royal Institute, “internal political reasons” are determining the stance of the minority left-wing coalition government.

Socialist Prime Minister Pedro Sanchez faces a balancing act of aligning with NATO allies and cajoling his far-left junior coalition partner Sumar, which is hostile to increasing military spending.

He has not submitted to parliament the plans for new defence spending of more than 10 billion euros, sparking criticism from his parliamentary allies whose support is crucial for the government’s viability.

The fragile coalition has wobbled in the past week after a corruption scandal implicating one of Sanchez’s inner circle sparked a crisis within his Socialist party.

– ‘Cultural’ barriers –

In Spain, “high political fragmentation makes it difficult to reach deals similar to those of other countries” such as Germany, said Santiago Calvo, an economics professor at the Universidad de las Hesperides.

Calvo also pointed to “delicate” public finances, with Spain’s debt one of the highest in the European Union at 103.5 percent of gross domestic product.

That figure has nonetheless receded in recent years, and continued strong economic performance should give the government “margin” to spend more, said Arteaga, who instead identified “cultural” hindrances.

The Iberian Peninsula’s greater distance from Russia than eastern European countries like Poland “reduces concern and urgency… we do not feel threatened, we do not want to enter armed conflicts”, Arteaga said.

“The government must explain to Spanish citizens the need to show solidarity” with countries in northern and eastern Europe, he said.

Ambiguity also surrounds the idea of investing five percent of GDP in defence.

NATO chief Mark Rutte has mentioned 3.5 percent of military spending in the traditional definition of the term by 2032, with the remaining 1.5 percent going to security in a broader sense, including border protection and cybersecurity.

At the NATO summit, “everything will come down to details” such as the flexibility of the definition of defence spending and the timeframe to achieve it, Arteaga predicted.

Robles said “Spain will not veto anything” at the summit, calling her country “a constructive ally”.

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FOX28 Spokane©

BRUSSELS: US defence chief

on Thursday pushed Nato to agree a deal on ramping up defence spending that can satisfy President Donald Trump at a summit later this month.

The volatile US leader has demanded that alliance members agree to boost defence budgets to five percent of their GDP at the June 24-25 meeting in The Netherlands.

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Nato chief Mark Rutte has put forward a compromise agreement for 3.5 percent of GDP on core military spending by 2032, and 1.5 percent on broader security-related areas such as infrastructure.

Spain Erupts Against NATO Rearmament Plan, PM Sanchez Faces Backlash From Coalition

“We’re here to continue the work that President Trump started, which is a commitment to five percent defence spending across this alliance, which we think will happen, we think has to happen by the summit at The Hague,” Hegseth said at the start of a meeting with Nato counterparts in Brussels.

“That’s our focus. Five percent, combat credible and capable forces, and then making sure Nato is focused on its core mission, continental defence, where its comparative advantage exists.”

Multiple diplomats say that Rutte looks on track to secure the deal for the summit in The Hague — but that some allies are still hesitant about committing to such levels of spending.

“I’m really, absolutely, positively convinced that at the summit with the 32, we will come to an agreement when it comes to this really big increase in defence spending,” the Nato chief said on Wednesday.

Most vocal in its reluctance is Spain, which is only set to reach NATO’s current target of two percent of GDP by the end of this year.

Putin Attacks NATO After Bloc Chief’s ’Speak Russian’ Taunt; ‘Open Offensive Against…’

Diplomats say that other countries are also haggling over making the timeline longer and dropping a demand for core defence spending to increase by 0.2 percentage points each year.

But the deal appears an acceptable compromise to most, which will allow Trump to claim that he has achieved his headline demand, while in reality setting the bar lower for struggling European allies.

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The United States has backed Rutte’s plan — but its ambassador to Nato insisted on Wednesday that Washington wants to see “plans, budgets, timelines, deliverables” to meet the target.

In a connected move, Nato ministers will sign off at their meeting in Brussels on new capability targets for the weaponry needed to face the threat from Russia.

Nato officials have estimated that, on average, meeting the new targets would cost countries between 3.5 and 3.7 percent of GDP.

Hegseth, a former TV presenter, rocked Nato on his last visit in February with a fiery warning that Washington could look to scale back its forces in Europe to focus on China.

Since then there has been no concrete announcement from the United States on troop withdrawals, but Natoallies remain on tenterhooks.

With Nato appearing headed for the defence spending deal, another thorny issue now threatens to overshadow the summit in three weeks time: what to do about Ukraine?

Trump’s return to the White House ripped up Washington’s support for Ukraine and upended the West’s approach to Russia’s three-year-long war.

Hegseth underlined US disengagement with Kyiv by skipping a meeting of Ukraine’s backers in Brussels on Wednesday.

Kyiv’s European allies are pressing strongly to overcome US reluctance and invite Ukraine’s President Volodymyr Zelensky to The Hague as a sign of support.

So far, Nato has only said that Ukraine will be represented at the gathering — but has not confirmed that Zelensky will be in attendance.

NATO countries meet next week for the first alliance summit since Donald Trump’s return to the White House. The U.S. president wants members to spend 5 percent of their GDP on defense, a big jump from the current 2 percent target, which Madrid will reach only this year.

To placate Trump, Rutte has proposed that the 5 percent target should include 3.5 percent of GDP on purely military expenditures and 1.5 percent for defense-related items such as military mobility and cybersecurity.

NATO’s decision-making process is consensus-based, meaning one ally can block the other 31 with a veto. Earlier this month, Spanish Defense Minister Margarita Robles said Madrid would not prevent NATO allies from agreeing to a new 5 percent target, but that her country would stick to 2 percent for now.

“Of course, it is not our intention to limit the spending ambitions of other allies or to obstruct the outcome of the upcoming summit,” the Sánchez letter reads, asking for either flexible wording that would make the target optional or a proper carve-out for Spain.

In contrast, Swedish political parties on Thursday agreed to meet the 5 percent target by 2032 and to borrow as much as 300 billion krona (€27 billion) to do so.

Sánchez argued that Spain doesn’t need to spend 5 percent of its GDP to fulfill its so-called capability targets, meaning new objectives of weapons inventory agreed by NATO defense ministers earlier this month.

In 2014, the NATO Allies agreed that within a decade, they would spend at least 2% of their GDP on defence. Following Russia’s 2014 annexation of Crimea and war in the Donbas, and its full-scale invasion of Ukraine in 2022, the European Allies have focused more on strengthening their military posture. Donald Trump’s insistence that Europe should take larger responsibility for its own security and the doubts he has sown regarding America’s commitment to its NATO obligations have strengthened European resolve and emphasised the need for the continent to foster greater military independence, including from the US. Trump’s vigorous return to these ideas at the start of his second term will make defence spending, in particular the Secretary General’s proposal for a new NATO target, the key agenda item for The Hague Summit.

Download and read as a PDF: The Central Issue. Defence Spending

The Wales Summit

Defence spending in relation to GDP has become one of the most important indicators of how committed the Allies are to the collective defence of NATO territory, of their readiness to improve their military capabilities, and of their wider commitment to transatlantic security cooperation. In 2006, NATO defence ministers established a guideline that Allies should invest 2% of their GDP in defence.[1] In 2014, following Russia’s illegal annexation of Crimea, its military interference in eastern Ukraine, and its support for the separatist so-called republics of Donetsk and Luhansk, heads of state and government formalised the guideline as the Wales Summit Defence Investment Pledge.[2]

Even after four years, only six Allies had reached the 2% target

At that time, only Greece, the UK, and the US met the goal.[3] Obviously, the remaining Allies could not align national budgets with the new NATO requirement immediately, but even after four years, only six Allies had reached the 2% target.[4] The trend over much of the following decade was that while the eastern flank Allies—those most vulnerable to the threat posed by Russia—increased their defence spending, most were unable to do so, and some even recorded a decrease. In many NATO countries, the pandemic drew attention away from defence. In others, an expectation that a return to ‘business as usual’ would be possible and that there was no need to jeopardise important economic relations with Russia, for example in energy supplies, also meant a lesser focus on defence than the Defence Investment Pledge required.

A Defence Spending Zeitenwende

This situation changed fundamentally with Russia’s full-scale invasion of Ukraine. NATO returned to a strong focus on collective defence, committing in Madrid to “significantly strengthen our deterrence and defence for the long term to ensure the security and defence of all Allies” and to fund defence “commensurate with the challenges of a more contested security order.”[5] Former German Chancellor Olaf Scholz gave the world a new term for this shift: zeitenwende, or a turning point.

The 2% target also returned to the NATO agenda. In Vilnius, in 2023, NATO stated that since the Wales Summit, “Allies have made remarkable progress, and all have increased their defence spending, [and] developed further their forces and capabilities.”[6] Nevertheless, even a year after the start of Russia’s full-scale invasion of Ukraine, only 10 Allies had reached NATO’s 2% target.[7] By the time of the 2024 Washington Summit, however, 23 of 30 Allies (including new members Finland and Sweden, but excluding Iceland and Luxembourg) were estimated to be on track to reach the target that year.[8] Almost all Allies had long-term plans to do so in the coming years, and some to significantly exceed it.[9]

Belgium, Canada, and Spain have announced intentions to increase their defence budgets to 2% years earlier than they had originally planned

The Trump-Biden-Trump Consensus

Following Donald Trump’s re-election, doubts about the degree to which the European Allies can rely on the most powerful NATO member have further impacted defence spending. Trump hinted for the first time in December 2024 that he would expect NATO member states to spend 5% of their GDP on defence. Indirectly, he also threatened to only defend Allies “if they pay their bills.”[10]

This demand from the US was, perhaps, no surprise. In his first term as president, Trump had urged European Allies to increase their defence spending to 4% of GDP.[11] But the Biden administration, too, had repeatedly called on its European partners to spend more on defence, one of the very few policy positions on which the Trump and Biden administrations overlapped.[12] US defence spending is significantly higher than that of the other 31 Allies, who, on average, spent 1.78% and 2.02% of their GDP in 2023 and 2024, even if it is nowhere near 5% (3.23% and 3.38% respectively).

New and Old Initiatives

Increasing the 2% target is not, however, a new discussion for the summer of 2025. The drive to adjust the target upwards is not solely related to Trump’s second election victory. In February 2023, Allies on NATO’s eastern flank called for a new target of 2.5% or 3%.[13] NATO was not, however, able to find consensus on this at its summit in Vilnius. Since spring 2024, more Allies have supported an increased defence spending target, usually to 2.5%, with former UK Prime Minister Rishi Sunak the most prominent supporter.[14] Since Donald Trump was re-elected, the number of proposals for a new target has, however, increased. In February 2025, NATO Secretary General Mark Rutte proposed 3% as a new minimum spending target, which was immediately supported by several Allies.[15]

In April 2025, US Secretary of State Marco Rubio once again called on all NATO member states to invest 5% of their GDP in defence.[16] As the summit approached, this figure began to be considered more seriously across the Alliance as more and more Allies connected it with convincing the president to remain committed to NATO.[17] The discussion in the lead-up to the summit has had positive practical outcomes, too. Belgium, Canada, and Spain, formerly far away from 2%, have announced intentions to increase their national defence budgets to reach NATO’s current 2% target years earlier than they had originally planned.[18]

3.5% or 5% for Defence?

Most Allies now support increasing the 2% target at the summit in The Hague. A consensus has begun to emerge around a figure of 5%, consisting of two parts: 3.5% for conventional defence, and 1.5% for “broader security-related items.”[19] This is the first time that a spending target for this second category has been on the table. One bonus is that it is also achievable for small countries such as Iceland and Luxembourg. Iceland has already announced an increase in its spending on defence-related investments.[20] The likely target date for implementation is 2032, giving time for lower-spending Allies to adjust their budgets.

Challenges

There are, however, still hurdles to overcome and questions to be clarified before a new target can be adopted. NATO Secretary General Mark Rutte must, of course, first turn the growing consensus into actual consensus in The Hague. Some Allies may still be difficult to persuade, for example, those that have persistently spent less than 2% in the past decade, or those that have only recently met the target. Such member states may find the magnitude of the new core defence target—more than twice the current spending level of, for example, Belgium, Canada, Italy, Portugal, Slovenia, and Spain—problematic.

Allies have already declared national defence spending plans that are difficult to reconcile with the proposed NATO target

Major NATO Allies, meanwhile, have already declared national defence spending plans that are difficult to reconcile with the proposed NATO target. France, the least discouraging, is planning to spend 3 to 3.5% by 2030.[21] Germany currently plans to spend more than 2% until 2029, although it has also declared that its defence spending will be oriented towards NATO targets.[22] The UK’s recently released defence review suggests that defence spending will rise to 2.5% by 2027 and to 3% in the next parliament (2029-34).[23]

There is clearly much still to discuss. Even so, only Spain has publicly declared it is not prepared to meet the new target (but also that it would not veto agreement in the North Atlantic Council).[24]

For some Allies, increases of tens of billions of euros will be needed to reach the new target. Allies may thus also believe that the proposed timetable for implementation will give them too little time to increase defence spending so substantially. Indeed, the proposed timeline for implementation has proved something of a sticking point with Allies such as Spain and the UK seeking longer implementation periods.[25] By contrast, Danish Prime Minister Mette Frederiksen, among others, has questioned whether 2032 is not too late.[26] Russia will continue to rebuild its military capabilities after the end of its war in Ukraine, and European intelligence agencies have warned that it will be able to attack NATO by the end of this decade. [27]

Another unresolved issue is the apparent lack of a concrete definition for the broader security-related items that make up the 1.5% part of the target. Dick Schoof, prime minister of the Netherlands, has said that it includes infrastructure and cyber-defence among other areas. It has also become known that it could include, for example, arms deliveries to Ukraine.[28]

But without a clear definition, there is a risk that this target will be misused by Allies. Italian Foreign Minister Antonio Tajani, for example, has reportedly suggested that the Messina bridge project, which connects Calabria to Sicily, should be included on the grounds that better connections to the island mean more security.[29] The example is frivolous, but if the intention of a new spending target is partly to keep the Americans on board, Europeans must avoid the impression that broader security-related items are only being introduced because most Allies have no means to raise their core defence spending to 5%.

Conclusion

It is almost certain that the Allies will agree on a new target in The Hague. The higher it is, the better prepared Europe will be for future military challenges. It is most important, however, that spending increases are not only for the short term, but that they are sustained for the coming years and decades. A new defence spending target will contribute to a more independent Europe in terms of defence, strengthen the European pillar within NATO, and produce a fairer burden sharing between all NATO Allies.

Endnotes

[1] NATO, “Defence expenditures and NATO’s 2% guideline,” 3 April 2025.

[2] NATO, “Wales Summit Declaration. Issued by the Heads of State and Government participating in the meeting of the North Atlantic Council in Wales,” press Release (2014) 120, 5 September 2014, para. 14.

[3] All defence spending figures in this brief: NATO, “Defence Expenditure of NATO Countries (2014-2024),” 17 June 2024.

[4] The original three, plus Estonia, Latvia and Poland.

[5] NATO, “Madrid Summit Declaration. Issued by NATO Heads of State and Government participating in the meeting of the North Atlantic Council in Madrid 29 June 2022,” press Release (2022) 095, 29 June 2022, para. 9, 19.

[6] NATO, “Vilnius Summit Communiqué. Issued by NATO Heads of State and Government participating in the meeting of the North Atlantic Council in Vilnius 11 July 2023,” press Release (2023) 001, 11 July 2023.

[7] Denmark, Finland, Hungary, and Lithuania had also achieved the goal.

[8] Luxembourg has a special arrangement: Jan Kreller, ”NATO bestätigt Luxemburgs Sonderweg [NATO confirms Luxembourg’s special path],” Luxemburger Wort, 12 July 2023.

[9] Felix Gasper and Tony Lawrence, “Defence Spending: Who Is Doing What? July 2024,” ICDS, 3 July 2024.

[10] Victor Goury-Laffont, “Trump reportedly wants NATO members to boost defense spending to 5 percent of GDP,” Politico, 21 December 2024.

[11] “Trump urges Nato members to double military funding target,” BBC, 11 July 2018.

[12] “75. Jahrestag der Nato: Biden bekräftigt die US-Mitgliedschaft im Militärbündnis [75th anniversary of NATO: Biden reaffirms US membership in the military alliance],” Tagesspiegel, 4 April 2024.

[13] Robbie Gramer, Amy Mackinnon, Jack Detsch, “Eastern Europe Wants NATO to Beef Up Defense Spending,” Foreign Policy, 2 February 2023.

[14] Noah Keate, “UK wants NATO defense target upped to 2.5 percent,” Politico, 24 April 2024.

[15] Paul McLeary, Joshua Posaner, “Rutte: NATO spending target will be ‘considerably more than 3 percent’,” Politico, 15 February 2025.

[16] Philippe Jacqué, “Marco Rubio on a mission to reassure Europe about NATO,” Le Monde, 4 April 2025.

[17] William Jackson, “NATO weighs increasing defense spending to 5% under US pressure,” Straight Arrow News, 14 May 2025.

[18] Maïthé Chini, “New €10-billion plan aims to beef up Belgium’s defence capacity,” The Brussels Times, 4 March 2025; Ali Abbas Ahmadi, “Canada pledges to meet Nato’s 2% defence spending target within a year,” BBC, 9 June 2025; Sam Jones, “Spain unveils €11bn plan to reach long-delayed Nato defence spending target,” The Guardian, 22 April 2025,

[19] “NATO’s Rutte says he assumes alliance will agree on 5% spending target,” Reuters, 26 May 2025.

[20] Alice Tidey, “Military-free Iceland should have ‘skin in the game’ in securing Arctic region, PM says,” Euronews, 28 May 2025.

[21] Leigh Thomas, “French fiscal woes crimp Macron`s defence spending plans,” Reuters, 5 March 2025.

[22] CDU, CSU, SPD, “Verantwortung für Deutschland [Responsibility for Germany],” April 2025.

[23] Dan Sabbagh, “UK yet to commit to Nato plan for rise in defence spending to 3.5% of GDP,” The Guardian, 11 June 2025.

[24] Henry Foy, Barney Jopson, “Spain left as sole major holdout on Nato’s 5% defence spending goal,” Financial Times, 24 May 2025; “Spain will stick to 2% of GDP defence spending goal, defence minister says,” Reuters, 5 June 2025.

[25] Laura Kayali and Jacopo Barigazzi, “Trump’s 5 percent defense spending target seemed far-fetched. Now not so much,” Politico, 4 June 2025.

[26] “NATO defence spending target may come ‘too late’ for Ukraine crisis: Denmark,” RFI, 2 June 2025.

[27] Katrin Jochecova, “Russia could start a major war in Europe within 5 years, Danish intelligence warns,” Politico, 11 February 2025.

[28] Aurelie Pugnet, “NATO countries would count Ukraine military aid toward new 5% defence spending target,” Euractiv, 3 June 2025.

[29] “Brussels Playbook,” Politico, 12 June 2025.

The exemption gives countries room to increase their spending on defense up to 1.5 percent of their gross domestic product each year for four years without breaching EU fiscal rules.

Germany is the only major EU economy planning to use the clause. Countries with stretched budgets, such as Italy or France, are not asking fiscal flexibility for procuring military equipment — nor are countries with much healthier public finances, such as the Netherlands or Sweden.

Despite falling into the latter group, Denmark also decided to join in on the request to send a political message. Economy Minister Stephanie Lose said in a statement: “The Danish activation will help send a signal to the outside world that the EU countries are united in the rearmament effort.”

The EU executive invited governments to decide by Apr. 30 in order to coordinate fiscal policy in front of markets and activate the clause altogether by July. However, the deadline is not binding.

Spanish Economy Minister Carlos Cuerpo said on Wednesday that his country will take a decision “over the coming months.”

Spanish Economy Minister Carlos Cuerpo said on Wednesday that his country will take a decision “over the coming months.” | Mariscal/EPA

Italian Finance Minister Giancarlo Giorgetti is convinced that the government in Rome can reach the NATO target of 2 percent in defense spending by tweaking its accounting to include more items. The country will wait until the NATO summit in June when new expenditure targets for all countries are supposed to be agreed upon — the U.S. is pushing to raise military spending for all members — to potentially consider further steps.