As NATO allies gather for this week’s summit, Secretary General Mark Rutte is expected to tout member nations’ commitment to ramping up military spending. However, the effort has been far from uniform, and the financial strain is already showing in several countries’ budgets.
Facing pressure from U.S. President Donald Trump, all 32 NATO members agreed at last year’s summit to push defence spending to 5% of GDP by 2035 — more than double the combined level for European nations and Canada in 2025.
Since that agreement, two distinct groups have formed. One group, led by Germany and many Nordic and eastern European countries, has managed to carve out the budget room to increase military spending. The other group includes several major economies that are finding the task much harder.
“The UK isn’t managing, for example. France isn’t and Italy isn’t either,” said Guntram Wolff, a senior fellow at the Bruegel economics think tank, referring to the three largest European economies after Germany.
NATO reports that its European members along with Canada spent $90 billion more on defence in real terms last year compared to 2024, as they work toward raising core military spending to 3.5% of GDP by 2035, with an additional 1.5% of GDP earmarked for security-related expenditures.
Ahead of the summit, Rutte highlighted that last year’s new spending amounts to $139 billion in nominal terms and expressed a “strong commitment” to reaching the combined 5% target on schedule.
Germany plans to use a rule change that exempts defence items from tight borrowing restrictions, allowing it to more than double its spending to over €200 billion (approximately $228.38 billion) between now and 2030, according to a budget draft reviewed by Reuters before a cabinet meeting Monday.
Poland, Lithuania, and Estonia — nations where concern about the threat from Russia runs highest — are already well on their way to meeting the new targets. Poland in particular devoted 4.3% of its GDP to defence last year.
Elsewhere, the drive faces both political and financial obstacles.
Britain recently unveiled plans to add an extra £15 billion ($20.01 billion) to its defence budget, with part of that offset by cuts in other areas. However, it came to light that one-third of the total remains without a funding source, presenting an early budget headache for likely incoming Prime Minister Andy Burnham.
Beyond the funding gap, the plan drew criticism from opposition politicians and former military leaders for not specifying when defence spending would reach 3% of GDP — a stepping stone to meeting Britain’s NATO obligation of 3.5% of GDP by 2035.
“Defence spending will likely remain one of the biggest fiscal pressures facing the UK in the medium term,” said Max Warner, senior research economist at the Institute for Fiscal Studies, a think tank.
Italian Prime Minister Giorgia Meloni is expected to announce at the summit that Italy — despite carrying one of Europe’s heaviest debt loads — will raise its combined core and non-core defence spending to 2.8% of GDP in 2026, roughly 0.71 percentage points above last year’s level. However, with increased military spending unpopular among many voters ahead of next year’s national elections, much of the increase will come from domestic security areas such as police operations.
France outlined plans in April to lift its defence spending from around 2% of GDP to 2.5% by the end of the decade, even as it works to bring its overall deficit in line with euro area rules — a difficult financial target as the country approaches its own presidential elections next year.
Spain’s Socialist government, meanwhile, is not expected to move from its position of refusing to spend more than 2.1% of GDP on defence, with any new resources likely directed heavily toward technologies that also have civilian uses.
Adding another layer of concern, NATO officials have questioned the spending figures submitted by the Czech Republic, Slovenia, and Albania, who claimed to have met the alliance’s previous target of 2% of GDP. Those three countries have been asked to review and resubmit their numbers.
“For us, the challenge is to ensure that Allies remain on the credible path towards that 3.5% commitment. If you keep on bumping along at 2%, then you’re not on the credible path,” a senior NATO official said.
Bruegel’s Wolff noted that, unlike at last year’s summit in the Hague, European leaders can now face Trump and point to the fact that they have stepped up to support Ukraine’s war effort, which has demonstrated its ability to hold back Russian advances.
Even so, some observers caution that even if European publics are beginning to accept greater military spending, defence industry suppliers may need stronger assurances that government spending will stay elevated before they commit to the investments needed to expand production capacity.
“There has been a before Trump, and there will be an after Trump, so this 5% target can change any time,” said Ana Boata, head of economic research at Allianz Trade. “So I think there is a bit of scepticism from European defence companies to actually ramp up investments in order to ramp up production,” she added.
