Spain Secures NATO Defense Spending Exemption at 2.1% of GDP

Spain has secured an exemption from NATO’s ambitious defense spending target of 5% of GDP following several days of intense diplomatic negotiations. This development comes just before the leaders of the military alliance are set to gather for a summit. Spanish Prime Minister Pedro Sanchez firmly stated that while Spain respects the desire of other countries to increase their defense investments, it will not commit to the 5% target. Instead, Spain aims to cap its defense expenditure at 2.1% of GDP, asserting that this level is sufficient to meet the alliance’s capability targets without the additional financial burden.

In a letter to the North Atlantic Treaty Organization Secretary General, Sanchez emphasized Spain’s commitment to meeting the alliance’s new weapons and troop targets. However, he did not commit to the financial implications that NATO had initially attached to these targets. The Secretary General responded by acknowledging Spain’s flexibility in determining its own path to achieving the capability targets, as outlined in the summit statement.

NATO had previously stated that 3.5% of GDP would be necessary to meet these targets, with an additional 1.5% in defense-related spending to reach the 5% goal desired by Trump. The draft statement for the summit was adjusted to allow for more flexibility, changing the language from “we” commit to “allies” commit to spending 5% of GDP on defense. This adjustment was intended to provide more leeway for member countries in meeting the spending targets.

Sanchez’s stance against the 5% target, which he deemed unreasonable and counterproductive for Spain, drew criticism from Trump, who labeled Spain as a “low payer” and urged the country to increase its defense spending. The summit in The Hague is taking place against a backdrop of heightened tensions, including the US’s involvement in Israel’s attacks on Iran and Europe’s anticipation of Trump’s decision on US troop levels in the region amid Russia’s ongoing conflict with Ukraine.

Allies had exerted pressure on Spain to align with the spending target, successfully persuading other skeptical members such as Italy and Belgium to comply. Sanchez’s proposal to increase defense expenditure to 2.1% of GDP faced internal opposition, including from allies within his own government. Spanish Foreign Minister Jose Manuel Albares emphasized that the focus should be on capabilities rather than percentages, asserting that Spain can achieve the organization’s capability targets with 2.1% of GDP, a position acknowledged and agreed upon by the organization.

The latest draft of the summit statement delays the spending target to 2035, removing the initial proposal for mandatory yearly increases. This adjustment is expected to ease the process for countries struggling to meet the spending targets. NATO’s existing target requires member countries to spend 2% of GDP on defense, with the new target allocating 1.5% to broader defense-related spending such as cybersecurity and infrastructure for troop and military equipment movement. The agreed criteria are broad enough for all allies to meet quickly, although increasing core defense spending from 2% to 3.5% will be more challenging.

As part of its routine process, NATO will review the necessary kit and troops in 2029, potentially providing some breathing room for the lowest spenders by tweaking the price tag attached to its capabilities. Washington has been advocating for an unprecedented increase in defense expenditure, arguing that European allies must take responsibility for their own security. Trump’s late comments introduced some uncertainty, as he expressed doubt about reaching the 5% goal while acknowledging that the US should commit to the target.