NATO Agrees to Boost Defense Spending to 5% of GDP by 2035 Amid Tensions

At the NATO Summit held in The Hague, Netherlands, on June 24–25, 2025, leaders from the 32-member alliance agreed to increase defense spending to 5% of each member's Gross Domestic Product (GDP) by 2035. This commitment includes allocating at least 3.5% to core defense expenditures and up to 1.5% to defense-related infrastructure and capabilities. The decision aims to strengthen collective defense in response to ongoing security threats, particularly from Russia. While most member states supported the initiative, Spain expressed reservations about meeting the target, leading to tensions within the alliance. The summit also reaffirmed NATO's "ironclad commitment" to collective defense as outlined in Article 5 of the Washington Treaty.

The agreement to raise defense spending to 5% of GDP by 2035 marks a significant shift from the previous target of 2%. This new commitment is divided into two components:

• Core Defense Expenditures (3.5% of GDP): This includes direct military expenses such as personnel salaries, weapons procurement, and ammunition.

• Defense-Related Infrastructure and Capabilities (1.5% of GDP): This encompasses investments in infrastructure and capabilities that support defense efforts, though specific definitions were not detailed during the summit.

The decision reflects a collective effort to bolster NATO's defense posture amid persistent security threats, particularly from Russia. NATO Secretary-General Mark Rutte described the move as "transformational," emphasizing the need for the alliance to "shift to a wartime mindset and turbocharge our defense production and defense spending."

Spain, under Prime Minister Pedro Sánchez, has expressed reservations about meeting the 5% GDP defense spending target. Sánchez argued that such an increase is "unreasonable and counterproductive," citing concerns over fiscal priorities and social spending. He proposed capping Spain's defense budget at 2.1% of GDP, stating that this level would suffice to meet the country's military capabilities.

This stance has led to tensions within the alliance. U.S. President Donald Trump criticized Spain's position, stating, "I think it's terrible what Spain has done," and suggested potential retaliatory trade measures. French President Emmanuel Macron cautioned against escalating tensions, emphasizing the importance of unity within NATO.

Despite the disagreements over defense spending, the summit reaffirmed NATO's "ironclad commitment" to Article 5 of the Washington Treaty, which states that an attack on one member is considered an attack on all. This collective defense clause remains a cornerstone of the alliance's unity and deterrence strategy.

The commitment to increase defense spending to 5% of GDP by 2035 has several implications:

• Economic Impact: Member states will need to allocate significant portions of their national budgets to defense, potentially affecting other areas of public spending such as healthcare, education, and social services.

• Defense Industry Growth: The increased spending is likely to benefit defense contractors and related industries, leading to job creation and technological advancements in the defense sector.

• Public Opinion: The decision may face scrutiny from citizens concerned about the prioritization of military spending over social programs, leading to potential political debates within member countries.

This agreement represents the most significant increase in NATO's defense spending targets since its inception over seven decades ago. Previously, the alliance had set a target of 2% of GDP for defense spending, a goal that many member states struggled to meet. The new 5% target underscores the alliance's response to evolving security challenges and the need for enhanced collective defense capabilities.

The 2025 NATO Summit in The Hague marked a pivotal moment for the alliance, with the agreement to significantly increase defense spending reflecting a unified response to emerging security threats. However, the differing positions of member states like Spain highlight the challenges of balancing national interests with collective obligations. As NATO moves forward, the implementation of this commitment and the maintenance of alliance unity will be critical factors in its ongoing effectiveness and credibility.