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Spain Completes €10.5 Billion Defense Pre‑Financing as Trump Threatens Tariffs and EU Pledges Response

Madrid says the modernization plan will put defense near 2% of GDP, rejecting a U.S.-driven demand for 5%.

Overview

  • The Council of Ministers approved three final decrees on Oct. 14 to pre‑finance all 31 modernization programs worth €10.471 billion, with Defense sources saying execution orders are expected before year‑end.
  • President Donald Trump said he is considering tariffs on Spain for refusing a 5% of GDP defense outlay and has previously floated expulsion, a step not provided for in NATO’s treaty.
  • U.S. ambassador to NATO Matthew Whitaker insisted all 32 allies, including Spain, must meet the 5% goal with no exceptions.
  • The European Commission warned it would respond to any unilateral trade measures against an EU member and underscored that EU institutions control the bloc’s trade policy.
  • Spanish officials, including Foreign Minister José Manuel Albares, called Spain a reliable ally and maintained that around 2–2.1% of GDP meets NATO capability needs, as opposition parties declined to rally behind the government yet said they do not want sanctions.