NATO Agrees to Ambitious 5% GDP Defense Spending Target by 2035 Amid Global Tensions

NATO agrees to a 5% GDP defense spending target by 2035, with Spain securing a partial exemption. Learn about the alliance’s bold plan to counter global threats amid U.S. policy shifts.

THE HAGUE, Netherlands — NATO member states have agreed to a significant increase in defense spending, setting a target of 5% of their gross domestic product (GDP) by 2035, according to diplomatic sources. The decision, finalized ahead of a critical summit in The Hague, marks a bold step to bolster the alliance’s military capabilities in response to growing global security threats, particularly from Russia and shifting U.S. priorities.

The new target, which expands on the current 2% GDP commitment, was driven by pressure from U.S. President Donald Trump, who has long advocated for higher contributions from NATO allies. The plan, proposed by NATO Secretary General Mark Rutte, allocates 3.5% of GDP to core military requirements, such as weapons and troops, and an additional 1.5% to broader security investments, including cybersecurity and infrastructure upgrades for military mobility.

Spain’s Exemption and Internal Disagreements

The agreement was not without controversy. Spain, which spent only 1.28% of its GDP on defense in 2024, initially resisted the 5% target. Spanish Prime Minister Pedro Sánchez argued that such a commitment would be “unreasonable and counterproductive,” potentially straining social spending. Following intense negotiations, Spain secured a compromise, agreeing to contribute 2.1% of its GDP to meet NATO’s core military requirements, effectively opting out of the full 5% target.

“All allies have agreed to the summit statement, which includes the new defense investment plan,” a diplomat told Reuters, speaking anonymously due to the sensitivity of internal discussions. However, NATO officials emphasized that Spain’s spending will be monitored, and the country may face pressure to align with the broader target if it falls short of military capability goals.

NATO agrees to 5% defense spending target by 2035

Strategic Context and Rationale

The decision comes amid heightened concerns over Russia’s military ambitions, with NATO Secretary General Rutte warning that Moscow could be prepared to challenge the alliance within five years. The 5% target also reflects Europe’s push to assume greater responsibility for its security as the U.S. shifts its focus to countering China’s influence in the Indo-Pacific region. U.S. Defense Secretary Pete Hegseth recently stated, “America can’t be everywhere all the time, nor should we be,” signaling a potential reduction in U.S. troop presence in Europe.

In 2024, NATO members collectively spent $1.3 trillion on defense, a significant increase from a decade ago. If all allies had spent 3.5% of GDP last year, the total would have reached approximately $1.75 trillion, highlighting the scale of the new commitment. Countries like Poland, which already exceeds 4% of GDP on defense, are leading the charge, while others, including Italy, Croatia, and Portugal, lag behind the current 2% benchmark.

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A Decade to Deliver

The 2035 deadline, extended from an earlier proposal of 2032, provides a ten-year window for nations to scale up their budgets. Italy, for instance, plans to meet the 2% target this year and gradually increase spending to 5% by 2035, with Prime Minister Giorgia Meloni calling for revised EU budget rules to accommodate the financial burden. The United Kingdom, a key advocate for the extended timeline, sees the target as achievable beyond the next parliamentary term, with Prime Minister Sir Keir Starmer aiming for 3% by 2034.

The agreement is set to be formally endorsed at the NATO summit on June 25, 2025, where leaders, including President Trump, will address the alliance’s strategic priorities. The summit will also focus on deepening ties with Ukraine and Indo-Pacific partners, as well as enhancing NATO’s defense industrial capacity to boost employment and security.

Challenges Ahead

Critics argue that the 5% target may strain economies, particularly for nations with high debt or competing domestic priorities. Spain’s exemption has raised concerns about alliance unity, with some diplomats warning that other countries, such as Canada or Belgium, might seek similar concessions. Additionally, the targets’ costs remain classified, limiting public scrutiny and independent verification.

As NATO navigates a complex geopolitical landscape, the 5% GDP defense spending goal underscores its commitment to collective defense. Whether all members can meet this ambitious benchmark by 2035 remains an open question, but the agreement signals a pivotal shift in the alliance’s approach to global security.