Will NATO’s Five Percent Target Be Met? Lessons from the Two Percent Shortfall

As NATO prepares to endorse an ambitious new five percent of GDP defense spending target, questions are emerging about its achievability, especially given that many allies haven’t yet met the previous two percent target. This ongoing shortfall, coupled with Spain’s secured exclusion and President Donald Trump’s insistence that the US should be exempt, highlights the inherent difficulties in securing widespread financial commitment.
The proposed five percent target is bifurcated: 3.5 percent for pure defense spending, a substantial increase from the current two percent minimum, and an additional 1.5 percent for critical infrastructure improvements, cyber defense, and societal preparedness. The challenge of reaching 3.5 percent for core defense is amplified by the fact that only 22 of 32 countries have met the lower two percent benchmark.
Prime Minister Pedro Sánchez confirmed Spain’s exemption, indicating that the final NATO communique would no longer mandate the target for “all allies.” This move could set a precedent for other financially constrained members, like Italy and Canada, to seek similar concessions. Trump’s persistent calls for allies to increase their contributions, coupled with his labeling of Canada as a “low payer,” further underscore the internal pressures surrounding equitable burden-sharing.
The driving force behind this intensified focus on defense spending is the shared concern among European leaders about Russia’s aggressive actions in Ukraine and its broader implications for regional security. NATO experts have indicated that robust defense against a potential Russian attack requires investments of at least three percent of GDP. While a 2032 deadline has been floated for achieving the five percent target, the feasibility and enforcement of this timeline remain subjects of ongoing negotiation.