María del Carmen Abascal was already frustrated over the lack of affordable housing in Spain, where rising rent could force her out of the apartment in Madrid she has lived in for 69 years.
Then she heard about the government’s plans to increase military spending this year by more than $12 billion. And if NATO had its way, it would be a lot more.
“They should put that money into social spending, in housing, in everything that people in Spain need,” Ms. Abascal said, her lips pursed indignantly during a recent interview in one of the last working-class neighborhoods in central Madrid, where housing prices are skyrocketing.
Perhaps nowhere in Europe has the tug of war between spending more for domestic priorities or for defense so vexed a government than in Spain.
Torn between a looming Russian threat to Europe and housing, health care and education needs, Spain has tried to split the difference. It was the only country in the alliance that openly refused to agree last month to spend up to 5 percent of its gross domestic product over the next decade on defense, as President Trump demands.
The drastic spending increase, which the rest of NATO’s 32 member countries committed to, would ease Europe’s dependence on the United States for security. But for Spain, it would mean nearly doubling its annual defense budget to an estimated $73.8 billion, draining funding for social programs.
Already, Ms. Abascal says her monthly pension cannot cover her rent, which more than quadrupled when an international investment bank bought her apartment building years ago. Most of her longtime neighbors moved out, unable to afford homes now largely marketed to wealthy expats or tourists.
“We will have to leave our houses if we have to go with the defense spending up to 5 percent,” said Ms. Abascal, 86. “We all will be lost.”
Spain has long been leery of building up its military, still haunted by the decades-long military dictatorship of Francisco Franco that ended with his death in 1975. It has the lowest military spending of any NATO nation, according to the most recent data available.
And the war in Ukraine feels like a continent away. It holds little everyday concern on the streets of Madrid, though Spain deployed troops to help protect NATO’s eastern flank after Russia’s full-scale invasion of Ukraine in 2022.
But Mr. Trump’s demands, coupled with widespread European concerns about Russia, prompted Prime Minister Pedro Sánchez to seek a balance.
Under his plan, Spain will increase spending on defense to 2.1 percent of its national income, “no more, no less,” Mr. Sánchez said before meeting other NATO leaders last month. Mr. Trump responded by threatening to punish Spain through American trade deals, although he gave no details.
Spain’s pledge amounts to about $38.9 billion in 2025, and is only slightly more than what NATO allies had each agreed to invest annually more than a decade ago.
Still, it is about $12.2 billion more than what Spain spent on defense last year — an increase that has frustrated members of Mr. Sánchez’s leftist coalition government, who want more money for public services.
“Our presence in the government is to develop a social agenda,” said Sira Rego, a left-wing politician and Spain’s minister for youth and children. “It would be a contradiction if we have to choose between that and increasing defense spending, following Trump decisions.”
Ms. Rego serves in Mr. Sánchez’s cabinet but not in his Socialist Workers’ Party, and she opposed the increase in defense spending. Raising it to 5 percent, she said, is unthinkable “if we want to save our welfare state.”
“That means that hospitals will be closed, schools will be closed, key support programs will disappear,” Ms. Rego said. “It means that the future of a generation, or several generations, will be at risk, because we produce more weapons.”
Mr. Sánchez cannot afford to lose much support within his fragile governing coalition. Already, his political legitimacy is challenged by a corruption scandal involving aides, which Spain’s conservative opposition is eager to exploit.
Through his office, Mr. Sánchez declined to be interviewed.
Mr. Trump is broadly disliked in Spain, a recent survey by the European Council on Foreign Relations found. That makes it easier for Mr. Sánchez to buck the American president.
However, NATO unity has a role in Spain’s security.
For generations, Spain and Morocco have clashed over the territorial rights of two small coastal cities in North Africa, Ceuta and Melilla. Morocco has long demanded custody and called Spain’s claim to the cities a vestige of colonialism. Spain has refused, saying they were part of it for centuries.
The European Union recognizes Spain’s sovereignty over the cities and sees them as part of E.U. territory. Though the dispute shows no sign of boiling over, officials said NATO could be compelled to protect Ceuta and Melilla, if ever necessary, because the military alliance has pledged to defend “every inch” of its members’ territories.
Some Spanish officials worry Mr. Trump would side with Morocco in any quarrel between the countries because it was part of a deal he struck during his first term to normalize relations between Arab-majority nations and Israel.
“With Ceuta and Melilla, if anything happens to them, there will be an open forum to discuss what to do for their defense — in military terms, in political terms,” said Senator Fernando Adolfo Gutiérrez Díaz de Otazu, a retired general and conservative politician who leads Spain’s delegation to NATO’s parliamentary assembly. “That’s what NATO is about.”
He criticized Mr. Sánchez for evading the NATO agreement to raise spending to 5 percent, particularly as Europe seeks to rely less on the United States.
“If you want to be autonomous,” Mr. Gutiérrez said, “you have to pay the bill.”
As Spain debates security spending, its defense industry has grown.
Industry revenues totaled about $8.6 billion in 2023, the latest data available, a nearly 9 percent increase from the year before, according to the Spanish Association of Defense, Security, Aeronautics and Space Technology Companies. Combat vehicles, military transport jets, radar, and antitank systems are among the Spanish products most in demand.
More than 22,000 people work for Spanish defense producers, and the additional $12.2 billion in military spending that Mr. Sánchez proposed is expected to create more jobs. About one-third of the increase will fund technology, including cybersecurity and satellites.
“It’s going to give us a lot of work,” said Ángel Escribano, the president of Indra Group, the Spanish defense and technology giant.
Current and former government officials would not discuss whether spending 2.1 percent of G.D.P. would be enough for Spain to meet NATO military capability targets.
Either way, military spending is certain to increase, diverting money from social welfare programs, said Julio Rodríguez, Spain’s former chief of defense. He is now a member of a left-leaning political party.
“What kind of security do we want?” he asked. “Military security? Human security? Ecological or economic security? That’s a debate that society needs to have.”
The housing crisis in Madrid has galvanized protests to protect renters. With the help of a renters’ union, Ms. Abascal, the pensioner, has been fighting an eviction order in court for nearly five years.
Until the final appeal is settled, she said, she refuses to leave.
“I don’t have anywhere to go,” she said. “What do I do? Move to the middle of the countryside and grow carrots?”
Lara Jakes, a Times reporter based in Rome, reports on conflict and diplomacy, with a focus on weapons and the wars in Ukraine and the Middle East. She has been a journalist for more than 30 years.
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