THE HAGUE — It turns out that pledging to spend 5 percent of gross domestic product on defense to appease Donald Trump may have been the easy part for NATO allies.
Now European leaders face a tougher test — selling huge increases in defense spending at home and preparing for potential U.S. troop reductions, all while deterring an expansionist Russia.
“Money alone won’t solve our problems,” German Chancellor Friedrich Merz told reporters after the June 24-25 NATO summit in The Hague.
“The percentage is set, but it’s only [effective] if we manage to turn them into actual capabilities,” echoed Norwegian Prime Minister Jonas Gahr Støre.
On Wednesday, NATO allies agreed to a new defense spending target of 5 percent of GDP by 2035 — a figure first floated by the U.S. president. It will be made up of 3.5 percent of GDP for purely military expenditures like weapons and troops, and 1.5 percent for defense-related investments such as cyber and mobility.
The Europeans had hoped that 5 percent defense spending pledge would strengthen Trump’s occasionally wavering commitment to NATO’s Article 5 mutual defense clause — an unspoken quid pro quo known as “5 for 5” in NATO corridors.
After a worrying start, Trump was positively glowing at the end of the NATO summit, saying that the alliance was “not a rip off” and underlining how much allied countries need the U.S. for their defense.
Now that they’ve secured the future of the alliance — at least for now — EU leaders face tough questions on how to back up their spending promises.
Most are heading from The Hague to Brussels for another summit Thursday where the key question will be how to boost the bloc’s defense spending and rebuild its military industrial complex after decades of post-Cold War neglect.
“The role of the NATO summit was to lay the foundations for what will happen next,” said Camille Grand, a former NATO assistant secretary-general.
Make the 5 percent happen
Options to boost defense spending include raising taxes, cutting public spending (including popular welfare and social programs), and issuing debt. The European Commission is helping with its new €150 billion loans-for-weapons scheme dubbed SAFE, and its planned smaller €1.5 billion European Defence Industry Programme. The EU’s next multi-annual budget is expected to earmark more cash for defense — but that will only kick off in 2027.
“The only European countries with public finances that allow them to aim for this [5 percent] target are Germany, Poland, and the Baltic and Nordic countries,” said François Heisbourg, senior adviser for Europe at the International Institute for Strategic Studies. “Everyone knows that France, Belgium, the U.K., Spain and Italy are absolutely not in a position to keep this type of commitment.”
Moreover, the further from Russia, the harder the sell — as evidenced by Spain’s eleventh-hour opposition to NATO’s new target.
Another warning of potential political discontent over higher spending was a short bus ride away from the NATO summit. That’s where Italy’s former Prime Minister and anti-establishment leader Giuseppe Conte on Tuesday led a gathering of around 70 leftwing politicians from across Europe who signed a declaration bemoaning the continent’s rearmament.
“Reaching 5 percent defense spending will inevitably require deep cuts to welfare, healthcare, education, social services, and business investment,” Conte told POLITICO.
Turn targets into weapons
Despite those difficulties, the EU will be spending massively more on defense than before. That creates another problem: How to spend it all while ensuring that the bulk of the cash doesn’t go to U.S. arms-makers.
Coordinating procurement and ensuring that countries don’t duplicate or cut across each other could be “just as hard” as reaching the 5 percent agreement in the first place, a U.K. official said.
It’s all the more tricky given the fragmentation of Europe’s defense industries — especially the land armament sector. Past initiatives to pool resources and invest jointly in pan-European capabilities have fallen short, with no success in the defense sector so far comparable to the Airbus consortium, founded in 1970.
That’s why Denmark, which takes over the rotating EU Council presidency in July, is looking to use its six-month term hosting discussions among capitals to identify projects that could be of interest to all EU members.
One of the most urgent tasks, many European officials and analysts say, is to become more independent of the U.S. on a range of weaponry such as deep-strike capabilities, as well as on “strategic enablers” including air-to-air refueling, tactical transport and satellites.
“No single European country can build the capacity on its own,” Czech President Petr Pavel told the NATO Public Forum on Tuesday. “That’s why we will have to come back to the concept of [the] framework nation, where the biggest European nations are capable of providing the skeleton of a capability and many mid-sized and smaller countries will contribute to develop the capability in full.”
US troop levels
Another looming question is what happens to American soldiers in Europe, something Washington’s ambassador to NATO, Matthew Whitaker, said would be addressed after the summit.
“On the topic of American troops withdrawal, the irony is that the real issues begin now,” said Grand, the former NATO official.
Pentagon policy chief and China hawk Elbridge Colby is conducting a global posture review expected to be completed in late summer, which will likely include a pullback of some U.S. troops in Europe, according to two defense officials and a person familiar with the work.
The review is looking at potentially removing the 20,000 troops the Biden administration deployed in 2022 after Russia’s full-scale invasion of Ukraine, many of whom were sent to Eastern Europe, the three people said.
Frontline countries are still hoping that Washington doesn’t do that. “Military assessment of the situation is very clear that troops in Europe are an important part of deterrence,” Lithuania’s Defense Minister Dovilė Šakalienė told WELT.
For now, European allies are in the dark about the review’s outcome. One NATO diplomat with U.S. troops stationed in their country said no discussions have yet occurred on the matter.
Asked by reporters if he was aware of a timetable for any reduction in U.S. troops, French President Emmanuel Macron replied: “No.”
“Would be nice to know,” he quipped.
Esther Webber and Chris Lunday as well as Philipp Fritz and Thorsten Jungholt, with WELT, a sister publication of POLITICO in the Axel Springer Group, contributed reporting.
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