NATO: Is the 5% Target Too Steep?

The NATO summit is just around the corner, and it will be interesting to see how things play out. Reportedly, the meeting has been shortened to just 2,5 hours—supposedly to accommodate Donald Trump’s notoriously short attention span. Still, shorter doesn’t necessarily mean worse. It might just be the ideal length to keep him focused.

In this blog post, I want to take a closer look at the 2% defense spending target—what it has actually achieved—and then explore the case for increasing that to 5%, and why that figure might be more realistic than it seems. Yes, countries are navigating a great deal of economic uncertainty right now, but investing in defense remains crucial. Let’s explore why.

 NO TARGET, THEN 2% TARGET 

For much of its history, NATO didn’t operate with a formal defense spending benchmark. Contributions were more of a gentleman’s agreement—everyone was expected to chip in, but how much and how seriously was left vague. Predictably, that led to imbalances. A handful of countries, especially the U.S., ended up doing the heavy lifting, while others enjoyed the benefits of the alliance without matching commitments. Over time, and especially as global security threats started piling up, that imbalance became harder to ignore.

The push for a concrete target came after Russia’s annexation of Crimea in 2014. The U.S.—under President Obama—led the charge, insisting that NATO needed to get serious about defense investment. That’s how the 2% of GDP target came into play. It was framed as a floor, not a ceiling—a baseline to ensure every member was contributing enough to collective security. While the U.S. was the loudest voice in the room, countries like the UK and Poland also supported the move. Since then, the target has stuck, even if many countries are still falling short. But at least now, there’s a number to point to—and a bit more pressure to deliver.

Then came Trump. In 2016, he made NATO spending a headline issue, publicly blasting allies who weren’t hitting the 2% mark and even threatening to pull the U.S. out of the alliance. His approach was blunt, often confrontational, but it got results. Some European governments, wary of being called out—or worse, abandoned—started increasing their budgets. Trump didn’t invent the 2% target, but he certainly put it on center stage. Whether it was diplomacy or intimidation is up for debate, but the pressure was very real.

DOUBLE IT, BUT WHY?

These days, there’s broad consensus that the 2% defense spending target just isn’t cutting it. But agreeing on how much more is enough? That’s where things get complicated—and frankly, the debate seems never-ending. Early suggestions pointed to 3% or even 3.5% of GDP as a new baseline, which felt ambitious but still within the realm of possibility. In practice, many countries—especially NATO’s front-line states like the Baltics and Finland—were already gearing up for more. The war in Ukraine has rattled them, and their response reflects that urgency. Poland, for instance, isn’t waiting around. It’s projected to spend a staggering 4.7% of GDP on defense in 2025, putting it miles ahead of the rest.

In contrast, southern and central European countries—Italy, Germany, Spain—have been dragging their feet. Spain, for example, spent just 1.3% of GDP on defense in 2024, well below the 2% target that’s fast becoming the norm. Germany, while pledging major increases, still struggles to turn those promises into real capability due to procurement bottlenecks and political inertia. For many of these countries, it’s not just about willpower—it’s also about a sluggish defense industry, bureaucracy, and shifting public opinion.

It’s not hard to see why there’s such a divide. Countries like Poland, Finland, and the Baltics see the war in Ukraine not as some distant crisis, but as a warning shot. For them, the threat is real and near. Their governments are asking, "Are we next?" Meanwhile, states further from Russia’s reach—geographically and psychologically—are more insulated. The political appetite for big defense spending just isn’t there when people don’t feel immediately threatened. The result is a patchwork of priorities across Europe, at a time when NATO unity is more critical than ever.

And layered on top of all this is a question of capacity: even for countries willing to spend more, actually turning money into military readiness takes time. Supply chains are strained, the defense industry is still catching up, and ramping up production of everything from artillery shells to armored vehicles isn’t as quick as signing a budget. So while the political will is growing in many corners of Europe, the capability gap isn’t closing overnight.

IS 5% ENOUGH? AND WHAT TO SPEND IT ON ?

So, is 5% enough? That depends on what you're trying to achieve. If the goal is simply deterrence—to make any potential aggressor think twice—then for some countries, yes, 5% might be more than sufficient. But if Europe wants to be able to defend itself with less reliance on the U.S., or respond quickly and independently to crises, then 5% isn’t excessive at all. For countries bordering Russia or within missile range, it’s less about a nice round number and more about making sure they’re not caught flat-footed. In a world where war is no longer theoretical, and where high-tech threats—drones, hypersonics, cyberattacks—are real and growing, the bar for "enough" keeps moving higher.

But it’s not just about spending more—it’s about spending smarter. Throwing billions at big-ticket items like tanks and fighter jets won’t mean much if logistics, ammunition stockpiles, and maintenance are neglected. Countries should be investing in things that build real resilience: robust air defenses, ready reserves, secure communications, drone capabilities, and yes, even boring but vital stuff like fuel storage and spare parts. Joint procurement within NATO could also stretch budgets further and reduce duplication. Defense isn’t just a matter of pride or posturing—it’s a system. And systems need to work when the pressure’s on.

CONCLUSION

In the end, defense spending isn’t about hitting an arbitrary number—it’s about being ready for what’s coming. The world has changed, and Europe can’t afford to be complacent. Whether it’s 2%, 3%, or 5%, what matters most is turning that money into real capability. Deterrence only works if it’s credible—and that means investing not just more, but wisely.