NATO pledges major defence spending hike by 2035

By Elan Castañares

The North Atlantic Treaty Organisation (NATO) has announced a landmark new defence spending commitment that will see its 32 member states aim to dedicate five percent of their gross domestic product (GDP) to defence by 2035.

The decision, finalised at the 2025 NATO Summit in the Hague, responds to growing global instability and renewed pressure from the United States, according to Reuters.

What the new NATO defence pledge means

Under the new framework, member states must allocate 3.5 percent of GDP to core military capabilities and up to 1.5 percent on broader defence-related areas such as infrastructure, cyber resilience and civil preparedness.

These expenditures include pensions, stockpiling, research and development and military aid, according to the NATO website.

The increase builds upon the previous two percent GDP benchmark agreed in 2014 after Russia’s annexation of Crimea.

At that time, only three nations met the target. 

Now, over 20 allies have reached or surpassed it, investing more than $485 billion in 2024 alone.

NATO Secretary General Mark Rutte hailed the “Hague Defence Investment Plan” as a foundation for “a stronger, fairer and more lethal NATO.”

Reactions from world leaders

United States President Donald Trump, attending his first NATO summit since 2019, described the agreement as a “big win for Europe and Western civilisation”.

The US Department of Defense stated Trump urged allies to spend the funds on “serious military hardware”, ideally from the United States, which he said makes “the best hardware in the world”.

Trump highlighted the June 2025 US attack on Iranian nuclear facilities as evidence of military superiority, emphasising the need to rebuild the defence industrial base.

French President Emmanuel Macron, while supportive of increased spending, criticised Trump’s trade confrontation with the European Union.

“We can’t say to each other, among allies, we need to spend more… and wage trade war against one another, it makes no sense,” the BBC quoted.

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Global, alliance-wide implications

Strategically, the five percent goal signals NATO’s intent to modernise and close capability gaps amid evolving threats.

New capability targets reportedly include air defence, drones, tanks and logistics, according to Reuters.

However, the Brussels-based Bruegel Institute has warned that the target is politically and financially unsustainable without a co-ordinated EU action.

It suggests joint procurement, EU bonds and centralised funding mechanisms to avoid duplication and make the targets viable, according to Bruegel.

The European Commission has been invited to propose financing initiatives and improve cross-border military mobility. 

EU finance ministers have also approved a EUR160 billion defence loan fund.

Spain’s rejection

Spain has emerged as the most vocal critic of the pledge.

Prime Minister Pedro Sanchez called the goal “unreasonable” and “incompatible” with Spain’s welfare state, arguing that a 2.1 percent spending level is sufficient to meet national defence needs, Euro News reported.

Sanchez’s government had already committed to a $10.5 billion increase in 2025 to reach the previous two per cent target.

Though Spain signed the summit’s final communique, Sanchez sent a letter to Rutte prior to the meeting rejecting the five percent figure.

During the summit, Sanchez appeared isolated from other leaders during the traditional group photo, symbolic of Madrid’s stance.

Russia, North Korea reactions

Russia has criticised the spending surge, with Russian Foreign Minister Sergei Lavrov warning it may lead to NATO’s collapse due to unsustainable budgets.

North Korea condemned the move as a “criminal act”, accusing NATO of expanding its military footprint into the Asia-Pacific, according to North Korea News.

The Rodong Sinmun editorial said the plan threatened peace and could trigger a new world war.

Pyongyang linked the pledge to increased NATO co-operation with US allies like South Korea and Australia, warning against “military collusion” in the region.

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