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2mo ago

NATO Adopts 5% of GDP Defense Spending Target by 2035, Faces Member Objections

It splits spending between core military needs and broader security investments, exposing alliance divisions over timeline and national implementation efforts.

Despite growing anxiety over global hotspots, the summit avoided direct mentions of several key geopolitical challenges (Bloomberg)
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Overview

  • NATO’s 32 member nations formally agreed at The Hague summit to boost defense budgets to 5% of GDP by 2035, dividing the commitment into 3.5% for traditional military capabilities and 1.5% for non-military security investments.
  • Spain declared it will not join the 5% threshold, saying 2.1% of GDP suffices for its needs, while Slovakia argued the 2035 deadline conflicted with economic priorities.
  • Germany has amended its Basic Law to exempt defence spending from debt limits, aiming to raise its military budget to 3.5% of GDP by 2029.
  • President Trump’s administration is actively pressing Japan and South Korea to increase their defense outlays in line with NATO’s new spending framework.
  • The shift to higher and broader defense spending targets is expected to spur global arms demand and reshape the defense industrial base.