The Hague: In a historic shift in its collective defence strategy, NATO member states have formally approved a bold and ambitious target of spending up to 5% of Gross Domestic Product (GDP) on defence and security by the year 2035. The decision, made ahead of the highly anticipated NATO summit in The Hague, signals a major escalation in military preparedness as global threats intensify, especially from Russia and hybrid warfare actors.
The newly approved plan consists of two primary components: the original 2% GDP defence spending minimum first agreed upon at the 2014 Wales summit has been expanded to 3.5% earmarked strictly for defence, and an additional 1.5% for strategic areas including cyber defence, satellite capabilities, military-grade artificial intelligence, and critical infrastructure protection.
While most NATO allies backed the proposal, Spain emerged as the sole nation to opt out of the new 5% target. Prime Minister Pedro Sánchez defended his country’s position, citing the unsustainable impact such a commitment could have on Spain’s public welfare system and fiscal stability. “Meeting 5% would either mean raising taxes or slashing healthcare and education both unacceptable,” Sánchez said. However, Spain reaffirmed its commitment to NATO’s original 2% guideline and emphasized its continued military cooperation through non-budgetary means such as logistics, personnel, and intelligence.
Spain's exemption, which was pre-negotiated with NATO's secretariat, has been accepted by alliance members, preserving unity while allowing flexibility for nations facing internal constraints.
U.S. President Donald Trump, who proposed the 5% goal earlier this year, lauded the agreement as a victory for American diplomacy and a corrective step toward "fairer burden-sharing." However, he clarified that the United States would not be legally bound by the 5% ceiling, given its already massive defence budget. “Europe must lead in protecting its continent. America will continue to support, but not subsidize, everyone else’s safety,” Trump said in a press briefing.
Analysts view this as a continuation of Trump’s long-standing push to compel Europe to shoulder more of NATO's financial and operational weight, especially as U.S. strategic interests pivot increasingly toward the Indo-Pacific.
Recognizing the economic implications of such a sweeping change, NATO extended the deadline to 2035, a decade-long timeline allowing member states to incrementally scale up their defence expenditures. A midterm review in 2029 will assess progress, readiness, and potential challenges in meeting the financial and logistical requirements of the plan.
The 5% spending target has sparked mixed reactions across the alliance. Eastern European nations like Poland, Estonia, and Lithuania have fully embraced the plan, citing the growing threat from Russia and the need to harden their eastern flank. Norway’s Prime Minister confirmed that her government had already begun implementing policies to meet the target within a five-year window.
However, other member states including Italy, Belgium, and Canada expressed concerns, calling for clearer definitions on what counts as “defence-related” spending under the 5% umbrella. Canada’s foreign minister noted that while Ottawa supports a stronger NATO, it must be balanced with “social responsibility and economic realism.”
The approval of the 5% target marks a paradigm shift in NATO’s operational philosophy. No longer content with minimal peacetime readiness, the alliance is preparing for high-intensity scenarios involving both conventional warfare and emerging technologies such as cyberattacks, drone swarms, and space-based threats. The increase in defence budgets will likely spur joint military exercises, procurement of next-generation equipment, and reinforcement of deterrent capabilities, especially along NATO’s eastern frontier.
As NATO heads into the formal Hague Summit on June 24–25, leaders are expected to sign off on detailed national implementation roadmaps and initiate broader defence cooperation mechanisms under this new framework.
While the 5% goal is being celebrated as a landmark decision in NATO’s 75-year history, it also presents a steep path forward. Governments must now strike a balance between public expectations for social investment and the urgent need for military readiness in an increasingly unstable world. If implemented successfully, the initiative could signal Europe’s evolution from defence dependency to strategic autonomy reshaping the global security architecture for decades to come.