Europeans were barely getting their head around spending NATO’s official target of 2 percent of their GDP toward defense when U.S. President Donald Trump upped his ask to 5 percent. That caused some panic, but it was also easy to dismiss that demand as simply impossible. For that same reason, NATO chief Mark Rutte’s declaration that Europeans may soon need to spend up to 4 percent triggered even deeper disquiet across the continent.
Two-thirds of NATO allies upped their individual NATO spending to 2 percent of their GDP just last year, partly hoping it would assuage Trump. Total defense expenditure of member states rose by more than 30 percent between 2021 and 2024, collectively reaching an estimated 326 billion euros (around $340 billion). Last year, Germany crossed the 2 percent mark for the first time, Italy languished at 1.49 percent, Canada was at 1.37 percent, Belgium was at 1.3 percent, and Spain was at the bottom with 1.28 percent. France and the United Kingdom, the more defense-savvy powers of the continent, were at 206 and 2.3 percent, respectively. Even the United States itself was below Trump’s (and Rutte’s) mark at 3.38 percent.
Europeans were barely getting their head around spending NATO’s official target of 2 percent of their GDP toward defense when U.S. President Donald Trump upped his ask to 5 percent. That caused some panic, but it was also easy to dismiss that demand as simply impossible. For that same reason, NATO chief Mark Rutte’s declaration that Europeans may soon need to spend up to 4 percent triggered even deeper disquiet across the continent.
Two-thirds of NATO allies upped their individual NATO spending to 2 percent of their GDP just last year, partly hoping it would assuage Trump. Total defense expenditure of member states rose by more than 30 percent between 2021 and 2024, collectively reaching an estimated 326 billion euros (around $340 billion). Last year, Germany crossed the 2 percent mark for the first time, Italy languished at 1.49 percent, Canada was at 1.37 percent, Belgium was at 1.3 percent, and Spain was at the bottom with 1.28 percent. France and the United Kingdom, the more defense-savvy powers of the continent, were at 206 and 2.3 percent, respectively. Even the United States itself was below Trump’s (and Rutte’s) mark at 3.38 percent.
These figures illustrate just how far most NATO allies are from fulfilling Trump’s demand. And while those with geographical proximity with Russia—Poland and Estonia with 4.12 and 3.43 percent, respectively—were at the top, they feel an understandable urgency to keep the United States onside, others further from Moscow are disinclined to slash their social welfare budget for the sake of further military spending. Reducing expenditures on education and health are extremely unpopular across Europe.
In 2023, just nine countries around the world spent 5 percent or more of their GDP on defense. Russia, Israel, and Lebanon were on that list—and all three were at war. Others included Saudi Arabia and South Sudan, which are not democracies and where the political class doesn’t have to closely mind popular opinion or demands about social welfare.
But there is a broad expectation in Europe that the government must allocate ever larger sums for health, education, and pensions, particularly as the number of older adults grow and the existing social infrastructure struggles to meet demand.
According to the World Health Organization’s regional director for Europe, Hans Henri Kluge, “For the first time ever, there are more people aged over 65 years than under 15 years in the European region.” Health care workers, meanwhile, are in short supply on the continent. According to the European Union’s action plan to lure foreign workers—which lists 42 occupations reeling under a shortfall—generalists, specialists, medical practitioners, and nursing professionals are at the top. More than a fifth of the bloc’s total population is classified as elderly. In 2023, Italy had the largest number of residents older than 65 at 24 percent. Italian Defense Minister Guido Crosetto admitted defense spending may have to be higher than 2 percent, which he said his country is struggling to meet and has set as a target for 2028.
“It seems there will be a shift,” he said but ruled out it could be as high as 5 percent “I don’t think it will be 5 percent, which would be impossible for almost every nation in the world right now, but it will not be 2 percent, which we are already struggling to reach, but it will be more than two.”
Leo Goretti, head of the Italian foreign-policy program at the Istituto Affari Internazionali, said that even raising the defense budget to 3 percent will be “huge” and seems quite unlikely at this juncture. “The problem is limited fiscal space and the demographic trend, which will mean cost for welfare—especially health care and pensions—will rise further. [It] does not give much leeway to increase spending in defense,” he said.
Germany’s finances are in better shape than Italy’s, but increasing defense at the cost of welfare is just as unpalatable. Various political groups in Germany oppose reprioritizing the budget—a term used to indicate pulling out funds from one pot, such as social welfare, and adding it to another, such as defense. Friedrich Merz’s Christian Democratic Union has also expressed an unwillingness to impose higher taxes on Germans.
German Defense Minister Boris Pistorius has said that increasing defense spending to 5 percent of GDP would amount to 42 percent of Germany’s total government budget. “National GDP is higher than a state government budget. So what Pistorius was trying to convey was that if Germany spent 5 percent of its GDP on defense, then it would amount to 40 percent of the total budget and leave little for all other government tasks,” said Ester Sabatino, a research associate at the International Institute for Strategic Studies.
“State budget lists the money a state has available to implement all policy actions in any sector,” Sabatino said. “For instance, the need to renovate infrastructure, invest in education, health.” If services people get from the state are reduced, then it could also hurt the overall allocation for defense as people could “signal to the politicians” that they don’t support an increase in guns over their welfare.
Italy and Germany are both opposed to reducing benefits, but they are on opposite sides when it comes to loosening the EU’s fiscal rules on government deficits or issuing common European debt for military spending. “The problem that some of the frugal EU countries, like Germany, have had with common debt is that it encourages hazardous incentive,” said Rafael Loss, senior fellow at the European Council on Foreign relations. “That means Germany is now co-responsible for refinancing Italian debt spending, that it might incentivize the Italian government to be less efficient, less cautious, in how it spends the debt.”
In the UK, the conservative government was toppled, in part, over long queues at the National Health Service (NHS) for basic medical services. Prime Minister Keir Starmer, from the Labour Party, hasn’t touched the NHS’s budget yet, but he has decided to cut the foreign aid budget—from 0.5 percent of gross national income to 0.3 percent in 2027— and divert that money toward defense. U.S. Defense Secretary Pete Hegseth hailed the move as a “strong step from an enduring partner.” But defense spending in the UK will still only rise to 2.6 percent of GDP by 2027—still far below Trump’s expectations.
European Council President António Costa said Europe’s new spending targets would be announced at the next NATO summit. “I would anticipate that, surely, at the next NATO summit in June, a target higher than 2% will be set,” he said. “Whether it’s 5%, whether it’s 3%, I don’t know, it’s a decision that member states will make within NATO.“
European officials are currently relaying a message that their focus is on figuring out how much spending is needed to be able to procure and maintain NATO capability targets and whether they can be procured jointly to reduce costs, instead of offering a set hike in the overall spending figure. “The 2, 3 or 5% (targets) are basically irrelevant, the decisive factor is that we do what is necessary to defend ourselves,” Merz told a German broadcaster.
Several experts told Foreign Policy that a duplication of weapons systems in different European countries is financially inefficient and leaves the forces and equipment less interoperable. “If you do joint buying and making use of the [NATO Support and Procurement Agency] Luxembourg structures and everything else we have within NATO and the EU, then you can deduct joint buying. You can deduct innovation,” Rutte told EU parliamentarians in Brussels.
Andrius Kubilius, the EU’s commissioner for defense and space, has suggested that an increase in national defense budgets might be front-loaded for joint investments in key projects now and paid back in future budgets. “This approach circumvents the need for an EU guarantee in the case of EU defense bonds,” Sabatino noted in an article. “But this would require countries to do a multi-annual financial planning of their budgets,” she told FP.
But even as Europeans are earnestly mulling over where to get the money to strengthen their defenses and keep NATO intact, a worry still looms: Even if they spent hundreds of billions more and bought U.S. weapons, would Trump keep his end of NATO’s bargain?
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