NATO member countries have agreed to a significant increase in defence spending, pledging to raise their collective target from 2% to 5% of gross domestic product (GDP) by 2035.
The decision was taken on Wednesday at the Hague. US President Donald Trump has been pushing the NATO allies to increase the defence spending in response to the growing security concerns across the Euro-Atlantic region.
The alliance of 32 countries signed a joint declaration on Wednesday.
NATO said it remains “united in the face of profound security threats and challenges.” The declaration pointed out to Russia as a long-term threat to Euro-Atlantic security and highlighted the persistent danger posed by terrorism.
“Allies commit to invest 5% of GDP annually on core defence requirements as well as defence-and security-related spending by 2035 to ensure our individual and collective obligations,” the statement said.
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What is The 5% NATO GDP Commitment?
The new NATO spending goal will be split into two categories. 3.5% of GDP will go toward “pure” defence needs. This included troops, weapons, and other direct military expenditures. The rest 1.5% of GDP will be allocated to broader defence and security-related infrastructure. This includes roads, bridges, ports, airfields, cyber-security measures, and the protection of energy pipelines.
NATO members will now be required to submit annual plans outlining a credible, incremental path to reaching the 5% target.
The Hague Summit Declaration issued by the Heads of State and Government participating in the meeting of the North Atlantic Council in The Hague#NATOsummit
— NATO (@NATO) June 25, 2025
NATO Chief Describes The Agreement As A “Quantum Leap”
NATO Secretary-General Mark Rutte, while adressing the summit, described the agreement as a “quantum leap” in the alliance’s defence posture.
“This will not only increase our security but also create jobs,” Rutte said. “Allies have made significant commitments to meet significant threats.”
📸 Leaders gather for a family photo at the #NATOsummit in The Hague 🇳🇱 pic.twitter.com/3Ky9lzlIQ7
— NATO Spokesperson (@NATOpress) June 25, 2025
Challenge For Some NATO Countries
In 2024, only 22 out of 32 members met the previous 2% target. The 2025 declaration is seen as a major leap for some NATO On average, NATO members spent 2.61% of their GDP on defence in 2024, though spending varied significantly by country. Poland led with over 4% of GDP spent on defence, while Spain fell behind with less than 1.3%.
NATO countries are expected to meet the 5% spending goal by 2035. The target will undergo a review in 2029, which could lead to adjustments based on changing geopolitical or economic conditions.
How Much More Money Will This Mean For NATO?
In 2024, NATO countries collectively spent over $1.3 trillion on core defence. Had they spent 3.5% of GDP instead, that number would have reached approximately $1.75 trillion. Meeting the new targets could therefore mean an increase of hundreds of billions of dollars annually.
GDP of NATO member countries. Source: Worldometer
Albania- $23,547,179,830
Belgium- $644,783,000,000
Bulgaria – $102,408,000,000
Canada- $2,142,470,000,000
Croatia – $84,393,795,502
Czechia $343,208,000,000
Denmark – $407,092,000,000
Estonia – $41,291,245,222
Finland- $295,532,000,000
France- $3,051,830,000,000
Germany- $4,525,700,000,000
Greece – $243,498,000,000
Hungary – $212,389,000,000
Iceland – $31,325,116,556
Italy- $2,300,940,000,000
Latvia- $42,247,850,065
Lithuania – $79,789,877,416
Luxembourg – $85,755,006,124
Montenegro- $7,530,593,375
Netherlands – $1,154,360,000,000
North Macedonia – $15,763,621,848
Norway- $485,311,000,000
Poland- $809,201,000,000
Portugal – $289,114,000,000
Romania – $350,776,000,000
Slovakia- $132,908,000,000
Slovenia- $69,148,468,417
Spain- $1,620,090,000,000
Sweden- $584,960,000,000
Türkiye – $1,118,250,000,000
United Kingdom- $3,380,850,000,000
United States- $27,720,700,000,000
The total GDP of all NATO member countries is approximately $52.4 trillion. A 5% commitment to defence spending would amount to around $2.62 trillion annually.
Why Is NATO Increasing The Defence Spending?
Several factors have prompted the member countries to increase the defence spending. The most important reason is Russia’s ongoing war in Ukraine.
“Russia could be ready to use military force against NATO within five years,” Secretary-General Rutte warned earlier this month.
There is also uncertainty surrounding the long-term US military commitment to Europe, especially under Trump.
“America can’t be everywhere all the time, nor should we be,” US Defense Secretary Pete Hegseth said earlier in June.
Is Every NATO Country On Board?
All the NATO members are not on same page. Spanish Prime Minister Pedro Sanchez has stated that Spain can meet its military goals by spending just 2.1% of GDP. While Spain did approve the summit statement, it has also signalled reluctance to meet the 5% threshold.
Despite this, NATO officials have made it clear that there are no opt-outs. Each member’s spending will be tracked, and countries that fall short will be expected to improve their commitments.
Trump lashed out at Spain on Wednesday, saying it was “terrible” that the country wouldn’t commit to meeting NATO’s 5% defense spending target by 2035.
Also Read: NATO Pledges To Spend 5 Percent Of GDP On Defence By 2035 As Trump Reaffirms US Support
