Ahead of its annual summit, NATO members have reportedly agreed in principle to raise defense spending to 5% of GDP by 2035. This includes 3.5% for traditional defense spending and an additional 1.5% for security-related infrastructure, such as cyber capabilities and intelligence operations.
The compromise, reached by NATO ambassadors, signals a willingness by member states to publicly meet long-standing U.S. demands for more equitable defense burden-sharing. However, translating this agreement into action will be a significant challenge for many countries.
Uneven Progress and Growing Resistance Challenge NATO’s New 5% Defense Spending Target
While NATO defense spending has increased since 2018, progress remains uneven. In 2014, member states agreed to spend at least 2% of their GDP on defense by 2024. At that time, only six countries met the target. As of 2024, 23 of NATO’s 32 members have reached the 2% mark, including the U.S., Poland, and the Baltic states.
However, many larger economies like Canada, Spain, and Italy still fall short. No NATO member has yet reached the newly proposed 5% target, making its feasibility a matter of concern.
NATO’s 5% GDP Defense Goal Faces Resistance, Budget Strains, and Political DividesSpain and Italy have already voiced resistance to the 5% proposal. Spanish Prime Minister Pedro Sanchez declared that Madrid would not adopt the new target, labeling it “unreasonable and counterproductive,” and noting that Spain only needs to spend 2.1% of GDP to meet NATO’s core requirements.
Similarly, Italy, having just reached the 2% threshold, expressed skepticism about the alliance’s current relevance. Defense Minister Guido Crosetto suggested that NATO may no longer serve a clear purpose in its present form, adding to doubts about Italy’s willingness to comply.
Support for 5% Defense Goal Faces Economic Hurdles and Regional Spending Imbalances
Even among countries that support the 5% goal, economic and political constraints could impede progress. The United Kingdom and Germany both support the increase in principle but face domestic fiscal pressures. The UK has reportedly asked for a three-year delay in implementing the hike.
Canada, meanwhile, has pledged to reach 2% by 2026, a timeline that is already a revision of its earlier 2030 goal. These examples highlight how even motivated allies may find the new spending expectations difficult to meet.
Some Eastern European countries are stepping up. Poland, concerned about Russian aggression, claims it is close to meeting the 5% threshold. Estonia has launched a defense investment program expected to raise its defense spending to 5.4% of GDP between 2026 and 2029.
However, this geographical imbalance in military spending could cause internal NATO tensions. As Carsten Nickel of Teneo notes, greater defense investment addresses only one part of a broader set of transatlantic challenges, including disputes over burden-sharing, trade, and China policy — all of which could resurface at the upcoming summit.