NATO agreed at its 2025 summit in The Hague to dramatically increase defence spending after sustained pressure from United States President Donald Trump for European allies to take greater responsibility for the continent’s security. Under the agreement, alliance members committed to spending 5 percent of gross domestic product on defence and defence related activities by 2035, with 3.5 percent allocated to core military spending and another 1.5 percent directed toward broader security measures such as cyber defence, infrastructure and resilience.

The new target represents one of the largest increases in defence investment since the end of the Cold War. It comes as Europe confronts an increasingly volatile security environment shaped by Russia’s war in Ukraine, rising geopolitical competition and uncertainty over the future scale of United States military commitments to Europe.

As NATO leaders gather in Ankara this week, the alliance is expected to showcase progress toward those goals. However, while some countries have significantly accelerated military investment, others are struggling to reconcile ambitious defence commitments with mounting fiscal pressures, political opposition and slowing economic growth. NATO Secretary General Mark Rutte is expected to argue at this week’s summit that alliance members are making meaningful progress toward their defence spending commitments. Yet behind the public message of unity, major differences have emerged over how quickly countries can meet the alliance’s ambitious targets.

Germany and several eastern and northern European countries have substantially increased defence budgets, driven largely by heightened concerns over Russia’s military threat.

Meanwhile, some of Europe’s largest economies, including the United Kingdom, France, Italy and Spain, face growing political resistance and budgetary constraints that may slow their progress toward NATO’s spending goals.

The differing pace of military investment highlights one of the alliance’s most significant long term challenges: translating political commitments into sustainable financial policy.

Germany and Eastern Europe Lead Defence Expansion

Germany has emerged as one of the strongest supporters of higher defence spending.

Following reforms to its constitutional borrowing rules, Berlin plans to more than double defence expenditure to over 200 billion euros by 2030, according to budget plans reviewed by Reuters.

Countries closest to Russia have also moved rapidly.

Poland devoted 4.3 percent of its gross domestic product to defence last year, while Lithuania and Estonia are already approaching NATO’s new targets.

For these countries, the security threat posed by Russia provides strong domestic political support for sustained military investment.

Western Europe’s Largest Economies Face Fiscal Constraints

While Germany has created additional fiscal capacity, several major Western European economies face far more difficult budget decisions.

The United Kingdom recently announced an additional 15 billion pounds for defence, but approximately one third of the package remains unfunded, raising questions about how future spending increases will be financed.

France plans to increase defence spending from roughly 2 percent of GDP to 2.5 percent by the end of the decade, but must simultaneously reduce its budget deficit while preparing for presidential elections.

Italy has pledged higher defence spending despite carrying one of Europe’s largest public debt burdens. Much of its planned increase will come through domestic security expenditure rather than conventional military capabilities.

Spain remains among the least enthusiastic supporters of NATO’s new target, maintaining that it will limit defence spending to around 2.1 percent of GDP while prioritising technologies with civilian applications.

Political Resistance Remains Strong

Defence spending has become increasingly controversial across several European countries.

Governments face growing pressure to balance military investment with healthcare, education, pensions and other public services at a time of weak economic growth and elevated public debt.

The political challenge is particularly acute in countries approaching national elections, where higher military spending may prove unpopular with voters facing persistent cost of living pressures.

This creates a delicate balancing act between meeting NATO commitments and maintaining domestic political support.

Can Defence Industries Keep Up?

Higher military budgets alone may not guarantee stronger defence capabilities.

Analysts warn that European defence manufacturers remain cautious about making large investments in new production capacity without confidence that higher government spending will continue over the long term.

Building new factories, expanding supply chains and increasing weapons production require multi year investment decisions.

Some industry observers remain uncertain whether future governments will maintain today’s ambitious defence commitments, particularly if geopolitical conditions improve or political leadership changes.

Questions Over NATO’s Spending Progress

NATO officials have also questioned defence spending figures submitted by several member states, including the Czech Republic, Slovenia and Albania, asking them to review and resubmit their calculations.

Alliance officials argue that countries currently spending around 2 percent of GDP cannot realistically achieve the 3.5 percent military target without sustained annual increases over the next decade.

Maintaining credibility therefore depends not only on reaching headline targets but also on demonstrating consistent progress year after year.

Why It Matters

Europe’s ability to increase defence spending will shape NATO’s future military capabilities and determine whether the alliance can gradually reduce its reliance on United States military support.

Failure by major European economies to meet spending commitments could create tensions within NATO, particularly as Washington continues urging Europe to assume greater responsibility for regional security.

At the same time, sustained military investment could strengthen Europe’s defence industrial base, improve military readiness and create long term economic opportunities in advanced manufacturing and technology.

Stakeholders

NATO

Seeking to strengthen collective defence while ensuring all members contribute more equally to alliance security.

European Governments

Balancing increased military investment with budget deficits, economic challenges and domestic political priorities.

United States

Continuing to encourage Europe to shoulder a greater share of NATO’s defence responsibilities.

Defence Industry

Watching for long term policy certainty before expanding production capacity and investment.

Taxpayers

Potentially facing higher public spending on defence alongside difficult choices regarding other government programmes.

Russia

Closely monitoring NATO’s military expansion and increased defence capabilities across Europe.

What Happens Next

NATO leaders are expected to reaffirm their commitment to the 5 percent spending target during the Ankara summit while presenting updated national defence plans.

Attention will then shift toward whether governments can convert political promises into approved budgets, whether defence industries respond with expanded production capacity and whether domestic political support remains strong as spending increases accelerate over the coming years.

Analysis: Europe’s Defence Awakening Faces Its Toughest Test

Europe’s renewed commitment to defence marks one of the most significant strategic shifts since the Cold War. Russia’s invasion of Ukraine, combined with President Trump’s demands for greater burden sharing, has fundamentally altered how European governments view military spending.

However, agreeing to ambitious targets is considerably easier than financing them.

The emerging divide within NATO reflects different economic realities rather than different security assessments. Countries such as Poland, Estonia and Lithuania see defence spending as an immediate necessity because of their geographic proximity to Russia. Germany has chosen to overhaul decades of fiscal restraint in response to the changing security environment.

By contrast, larger Western European economies face more complex political calculations. High public debt, ageing populations and pressure to maintain social welfare programmes make rapid increases in defence budgets far more difficult. Governments must convince voters that long term security justifies substantial reductions in spending elsewhere or increased borrowing.

Another challenge extends beyond government budgets. Europe cannot strengthen its military simply by allocating more money if defence manufacturers lack the confidence or capacity to expand production. Without long term procurement guarantees, companies may hesitate to invest billions in new facilities that depend on sustained government demand.

Perhaps the greatest question is whether NATO’s new spending targets will survive political change. Defence investments often span decades, while governments can change every few years. Industry leaders remain cautious because future administrations could revise spending priorities if security threats evolve or economic conditions deteriorate.

Ultimately, the Ankara summit will demonstrate that Europe has begun spending more on defence. The more difficult challenge will be maintaining that momentum over the next decade. NATO’s credibility will depend not only on ambitious financial targets but on whether those investments translate into stronger armed forces, a more resilient defence industry and a lasting shift in Europe’s strategic posture.

With information from Reuters.