NATO Agrees to 5% Defense Spending Goal; Spain Granted Exception
NATO Agrees to 5% Defense Spending Goal; Spain Granted Exception
NATO allies have reached an agreement to set a new defense spending target of 5 percent of gross domestic product (GDP) by 2035. This agreement, reached after negotiations involving all 32 member states, will be formally confirmed at a NATO summit in The Hague.
The 5 percent target, initially proposed by U.S. President Donald Trump, will consist of 3.5 percent allocated to “hard defense” (weapons and troops) and an additional 1.5 percent for defense-related investments such as cybersecurity and military mobility. The target’s implementation will be reviewed in 2029.
Spain initially opposed the 5 percent target, with Prime Minister Pedro Sánchez arguing that such a significant increase would be disproportionate and negatively impact social spending. After negotiations, a compromise was reached. The final wording of the agreement changed from “we commit” to “allies commit,” allowing Spain to maintain flexibility and avoid committing to the 5 percent target while still meeting updated NATO capability targets approved on June 5th.
Spain will instead contribute 2.1 percent of its GDP to defense spending, a figure Prime Minister Sánchez described as sufficient to fulfill Spain’s commitments to NATO. This approach was confirmed in a note from NATO Secretary-General Mark Rutte to Prime Minister Sánchez, which stated that the agreement would allow Spain to determine its own path for reaching capability targets and submitting annual plans.
The original proposal for the 5 percent target to be reached by 2030 faced opposition from several countries concerned about the rapid increase’s potential impact on public finances. As a result, the deadline was extended to 2035. NATO operates by consensus, requiring unanimous approval from all member states for any agreement.
While the 5 percent target applies to NATO allies, President Trump indicated that it would not apply to the United States. NATO officials have argued that increased defense spending is necessary to counter growing threats from Russia and to enable Europe to assume greater responsibility for its own security, particularly as the United States shifts its military focus towards China. The current NATO defense spending target is 2 percent of GDP.
The agreement represents a compromise that addresses the concerns of various member states while establishing a collective goal for enhanced defense capabilities within the alliance. The agreement’s final details will be formally confirmed at the NATO summit. The 2029 review will allow for reassessment of the 5 percent target and its implementation.
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