Nato allies have reached agreement on a new defence spending target of 5 per cent of gross domestic product, as demanded by US president Donald Trump, who is due to attend the alliance’s summit in The Hague this week.
Last-minute complications thrown up by the Spanish government, when prime minister Pedro Sánchez demanded a special exemption from the new target, appeared by Monday to have been resolved by the use of more flexible terms for Madrid.
The two-tier agreement – an increase of 3.5 per cent of GDP for military spending combined with an additional increase of 1.5 per cent of GDP for related non-military costs – is a major win for Nato secretary general, Mark Rutte.
Rutte was referred to as the “Trump whisperer” in 2018 when he persuaded the US president not to abandon the military alliance. His task now, in wartime, is even more onerous.
It is no exaggeration to say that in the current geopolitical climate Nato’s future – perhaps even its existence – hinges on the capacity of its 32 member states to increase their military spending to 5 per cent of GDP, as demanded by Trump.
The US president has repeatedly accused Europeans of sheltering under its nuclear umbrella without paying appropriately for the privilege. In March he said: “If you’re not going to pay, we’re not going to defend.”
Many European countries have, in fact, increased defence spending since Russia’s invasion of Ukraine in 2022 – although not by enough, either for Trump or the scale of the threats the Continent faces.
Figures from the European Council show EU member states’ total defence expenditure rose by more than 30 per cent in 2021-2024 to about €326 billion – about 1.9 per cent of EU GDP.
Even so, only 22 of Nato’s 32 members met its annual spending target of 2 per cent of GDP last year.
Countries such as Canada, Italy and Belgium still lag behind but have pledged to reach the target by the end of this year.
The US also falls shy of the 5 per cent mark. According to the Stockholm International Peace Research Institute, it spent $997 billion on defence in 2024, roughly 3.4 per cent of GDP. However, this is the highest outlay among the major developed economies, exceeding the combined total of the next nine highest spenders.
In the top job only nine months, Rutte tested a two-tier plan at an informal meeting of Nato foreign ministers in Turkey last month.
On foot of their response, he has written to the 32 allies asking them to increase their military budgets to 3.5 per cent of GDP on “hard military spending”.
He has also proposed a further 1.5 per cent be earmarked for dual-purpose civil-military spending, such as infrastructure and cybersecurity – bringing the total to Trump’s 5 per cent.,
The two together bring the total into line with Trump’s demand for 5 per cent – handing the president the kudos.
For those countries who complain the increase is too costly, the former Dutch prime minister has included a softener that suggests an incremental increase to the 5 per cent, initially by 2032, then by 2035.
As part of Operation Orange Shield, fighter jets, attack helicopters and navy frigates will patrol The Hague during the summit, with Patriot missile batteries ringing the city and lockdown around the conference centre.
Some 9,000 people, including 45 heads of state and government, are due to attend the meeting on Tuesday and Wednesday.
King Willem Alexander will host a formal dinner on Tuesday. Total cost: €183.4 million.
