LONDON – NATO’s European members have pledged to dramatically increase defence spending to appease former U.S. President Donald Trump, with a new 5% GDP target that analysts say many nations cannot realistically afford.
At the NATO leaders’ summit in The Hague on Tuesday, the alliance announced its commitment to this ambitious target, seeking to reassure Trump amid persistent doubts about his support for NATO’s mutual defence clause. Trump responded with a pledge of solidarity, declaring that the United States would stand with Europe “all the way.”
But beneath the political optics lies a significant financial challenge. Most European governments would need to more than double current military spending levels to meet the new benchmark — a move that could require deep budget cuts elsewhere or extensive borrowing, which many are ill-positioned to pursue.
“They will not get there,” said Guntram Wolff, a senior fellow at the Bruegel think-tank. “If you are a highly indebted country, you can’t issue more debt. It means very difficult budgetary choices.”
Billions Needed, But From Where?
To meet the 5% target, European Union countries — whose collective debt already exceeds 80% of GDP — would need to nearly triple their current defence expenditure from €325 billion to over €900 billion. The UK alone would have to find an extra £30 billion, despite already spending more on debt servicing than on any sector apart from health.
While Germany may manage the increase due to years of fiscal restraint, countries like Spain and Slovakia have expressed concern. Spain’s Prime Minister Pedro Sánchez, whose government did not sign the pledge, warned the goal was “incompatible with our welfare state.”
Meanwhile, NATO allies closer to Russia, such as Poland, the Baltic states, and Finland, are more accepting of the financial burden, citing heightened security risks.
‘Guns or Butter’ Debate Intensifies
The new pledge has reignited Europe’s long-standing debate over how to balance defence spending with public welfare. Social protections account for as much as 30% of GDP in some European countries, and even modest cuts could spark political backlash.
“There will still be a welfare state, but perhaps a less generous one,” Wolff added, hinting at the likely outcome if governments stick to the commitment.
Analysts also expect member states to stretch the definitions of defence-related expenditures. For example, France is exploring whether policing by gendarmes—formally under the defence ministry—could be counted as part of the new target.
The 5% breakdown includes 3.5% for core defence such as troops and weaponry, and 1.5% for related infrastructure like military-grade roads and bridges, giving governments room to reclassify existing spending.
A Pledge Likely to Be Missed
Though NATO countries are publicly united on the need to bolster defence amid rising tensions with Russia, experts question the viability of the 5% goal.
“Spending goals will simply be missed,” predicted Nick Witney of the European Council on Foreign Relations. “The transformation required will begin to take shape, but less rapidly and less coherently than if more realistic targets had been set.”
Long timelines — in some cases stretching to 2035 — may further dilute the urgency, allowing national governments to quietly downgrade or defer their commitments.
Still, for now, the 5% target has achieved its immediate aim: securing political goodwill from Donald Trump, whose influence remains a pivotal factor in transatlantic security policy.
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