In recent discussions, some world leaders have voiced skepticism regarding the ambitious defense spending goal of 5 percent of GDP proposed by President Donald Trump in early January. The NATO alliance set a 2 percent target back in 2014, yet over a decade later, data indicates that only 70 percent of member states are on track to meet this benchmark. This situation raises questions about the viability of increasing defense budgets significantly across the alliance.
As of last year, the landscape of defense spending among NATO members varied significantly. To achieve the new 5 percent target, countries may resort to creative accounting methods, potentially including infrastructure projects that serve dual military and civilian purposes. Poland stands out as a leader among NATO nations, dedicating over 4 percent of its GDP to defense, according to NATO statistics. This commitment nearly doubled following Russia's invasion of Ukraine in February 2022, prompting similar responses from Estonia, Latvia, Lithuania, and Finland, all of whom have ramped up their defense investments.
The United States currently allocates around 3.5 percent of its GDP to defense spending, making it the highest spender in absolute terms among all countries. Meanwhile, the United Kingdom has consistently committed approximately 2 percent of its GDP to defense. Recently, the UK Prime Minister’s office described its pledge to increase defense spending to 5 percent as “historic,” emphasizing a deeper commitment to NATO and the security needs of the nation’s working class.
Conversely, Spain has lagged behind in defense spending for over a decade. Spanish Prime Minister Pedro Sánchez has argued that a modest increase in the defense budget would allow Spain to fulfill its obligations in ensuring European security. Nonetheless, he stated last weekend that Spain would not meet the ambitious 5 percent target. In response to this, Trump expressed intentions of imposing consequences, stating during a news conference, “We’re negotiating with Spain on a trade deal, and we’re going to make them pay twice as much — and I’m actually serious about that.”
Over the past decade, both Greece and Turkey have fluctuated their defense budgets, often exceeding 3 percent of GDP in response to regional tensions and cross-border migration issues. These variations highlight the dynamic nature of defense spending within the alliance, as countries adjust their budgets based on geopolitical pressures.
Iceland, the only NATO member without a standing military, will not be required to adhere to the 5 percent defense spending goal. However, leaders of Iceland’s ruling coalition recently published a joint opinion piece in Visir, an Icelandic online newspaper, reaffirming their commitment to enhancing national defense and security infrastructure. They have set a target to increase defense-related spending to 1.5 percent of GDP by 2035.
In a concerted effort to track progress on defense spending commitments, NATO members have agreed to conduct a 2029 budget review. This review will assess collective advancements in meeting the outlined spending goals established in a joint declaration issued on Wednesday, indicating a collective approach towards enhancing military readiness and security among member states.
