EDITORIAL: 5% of GDP: Europe finally pays the price of its own security

EDITORIAL: 5% of GDP: Europe finally pays the price of its own security

Introduction: The end of a thirty-year illusion

The peace dividend is over — definitively

For three decades, Europe enjoyed an extraordinary luxury: allowing itself to be protected by the United States while spending the minimum on its own defense. The post-Cold War peace dividends funded generous welfare states, modern infrastructure, an enviable quality of life — while armies atrophied, arsenals emptied and defense production capacities were dismantled. February 2022 put an end to that illusion.

At the NATO summit in The Hague on June 24 and 25, 2025, the 32 member nations (with the exception of Spain) made the historic commitment to devote 5% of their annual GDP to defense and security-related spending by 2035. The target is structured in two tranches: at least 3.5% for core military spending and up to 1.5% for security investments — cyber defense, critical infrastructure, logistical resilience. This is no longer a target to be met "someday." It is a contractual commitment with national roadmaps required as of 2026.

An unprecedented quantitative leap

To grasp the scale of the change, one need only recall the figures. Until 2025, NATO's target was to devote 2% of GDP to defense — a threshold that many members already struggled to meet. Moving to 5% means more than doubling the collective defense effort. For a country like France, which devoted approximately 2.1% of its GDP to defense, this would represent a leap to 125 to 130 billion euros annually — compared to 55 billion currently. The effort is colossal.

This leap from 2% to 5% demands not only budgetary decisions but a genuine industrial reorientation. European economies must scale up their production capacity in munitions, drones, armored vehicles, air defense systems and military communications systems. This transformation takes time — and investments that run into the tens, even hundreds, of billions of euros per nation.

Why 5% and not 2% or 3%?

The Ukrainian lesson on the real costs of modern war

The war in Ukraine provided an accelerated and brutal crash course on what defense against a major military power actually costs. Munitions consumption exceeded existing stockpiles by several orders of magnitude. The needs in air defense systems, drones and electronic warfare equipment revealed gaping gaps in Western arsenals. Ukraine held against Russia — but at what cost, and with what massive external support.

NATO planners revised their estimates in light of these combat realities. A member country attacked by Russia today would need to be able to defend itself for weeks without immediate external support — and to hold over time. That requires massive stockpiles, a defense industrial base capable of rapid production and forces trained for high-intensity warfare. All of this costs far more than 2% of GDP.

American pressure: Trump as an involuntary catalyst

It would be dishonest not to acknowledge the role played by Donald Trump in accelerating these commitments. His repeated threats to condition American protection on compliance with spending targets, his partial troop withdrawal from Europe, his sharp criticism of allied "free-riders" galvanized Europe in a way that years of well-meaning diplomacy had failed to achieve. Paradoxically, Trump may have done more for European defense than any other American president of the past decade.

European allies' and Canada's defense spending jumped 20% in 2025 compared to 2024. For the first time, Norway surpasses the United States in military spending per capita. All NATO members now exceed the 2% of GDP threshold — long considered out of reach for several of them. This is not the effect of goodwill — it is the effect of pressure.

What 5% concretely means for each nation

Poland, Europe's defense leader

Poland is the country that has most rapidly translated its commitments into reality. It already devotes more than 4% of its GDP to defense in 2026, with massive procurement orders placed with American, Korean and European manufacturers. Its acquisition program includes K2 tanks, HIMARS systems, F-35s, Patriot air defense systems and Apache helicopters. Poland is in the process of building one of the most powerful conventional armed forces in Europe.

The Baltic states — Estonia, Latvia, Lithuania — which share borders with Russia or its ally Belarus, have also accelerated their spending. Their motivation is existential: after Latvian intelligence warnings in June 2026 about a possible Russian provocation, the urgency is no longer abstract. These small nations know they would be the first targets of aggression — and they are building their defenses accordingly.

Germany, the giant waking up slowly

Germany, with Europe's largest economy, represents the most significant stake in the 5% target. Its defense industry — Rheinmetall, Krauss-Maffei Wegmann, HENSOLDT — has the capabilities to play a major role in the alliance's defense industrial revolution. But German constitutional constraints on debt, cultural resistance rooted in national history and budgetary complexity are slowing the transformation.

The decision to establish a permanent brigade in Lithuania — the first permanent German troop presence in an allied country since World War II — is a strong political signal. Germany also announced a collaboration with Ukraine for the production of long-range weapons systems. These decisions represent a profound cultural rupture for a country that had made pacifism a near-constitutional value.

Financing the leap to 5%: where will the money come from?

Three possible funding sources

Moving from 2% to 5% of GDP represents, for all European allies combined, hundreds of billions of euros in additional annual spending. These resources can come from three sources: budgetary reallocation (reducing other spending lines), debt (borrowing more) or economic growth (if GDP grows, 5% represents more euros without a heavier relative burden). In practice, it will be a combination of all three.

The EU has also launched several collective defense financing mechanisms — resilience funds, loan guarantee instruments, the SAFE program (Security Action for Europe) — that allow member states to borrow on favorable terms to finance arms purchases. These mechanisms complement national budgets and allow certain investments to be pooled, particularly in shared defense infrastructure.

The painful political trade-offs

In practice, increasing defense from 2% to 5% of GDP in the current context requires difficult political trade-offs. European governments need to explain to their voters why money is going to tanks and missiles rather than hospitals and pensions. This debate is inevitable — and healthy. Countries like France, Italy or Spain, facing significant budgetary constraints and populations attached to their social models, will struggle to reach 5% within the set timelines.

The temptation will be strong to "inflate" the figures by including in the definition of security spending items that do not strictly belong there — development aid linked to security, civilian cyber defense, refugees classified as security threats. NATO will need to be vigilant about definitional rigor so that 5% represents a military reality and not creative accounting.

The 2029 review: the moment of truth

A crucial intermediate milestone

The declaration of the The Hague summit set a trajectory review in 2029 — at the midpoint between the 2025 commitment and the 2035 final deadline. This review will be the moment to measure real progress: who is on track, who is falling behind, which nations need roadmap adjustments. It is also the moment when more binding decisions could be taken for allies that are not advancing fast enough.

The Ankara summit in July 2026 will be the first opportunity to take stock of the initial roadmaps submitted by mid-2026. Nations that have not submitted a credible plan will face pressure from their allies — and potentially the conditionalities imposed by Washington on contributions to NATO's common spending. Hegseth has been explicit: American dues will be conditioned on allies' compliance with their spending commitments.

The ultimate objective: a rebalanced NATO

Behind the 5% target looms a broader vision: a rebalanced NATO, where Europe takes primary responsibility for its own conventional defense, while the United States provides nuclear deterrence, intelligence and global power-projection capabilities. This is the concept of NATO 3.0 — an alliance in which Europe is no longer the free-rider of American security, but a full military actor in its own right.

Reaching 5% of GDP is therefore not merely a budgetary target — it is a political act of collective accountability. Europe is telling the world, and itself, that it is ready to bear the price of its freedom. After thirty years of denial, this is a change in nature — not merely in degree.

The defense industry: the nerve of the transformation

Europe's defense industrial base under reconstruction

The 5% target will only make sense if the money translates into real military capabilities — and that depends directly on the vigor of Europe's defense industrial base. Decades of underinvestment reduced production capabilities, optimized supply chains for peacetime conditions, and shrunk the ranks of specialized workers. Relaunching this industrial base takes time — years, even a decade — before production rates are truly equal to the task.

Companies such as Rheinmetall, BAE Systems, Leonardo, Thales and KNDS have announced massive expansion plans in response to government orders. Sweden, with Saab, and Finland, with its defense industries, are also playing a growing role. The NATO industry forum at the Ankara summit aims precisely to accelerate this industrial transformation by creating durable public-private partnerships at the transatlantic scale.

Interoperability as a condition of effectiveness

Increased spending is not enough if the systems purchased are incompatible with one another. NATO must ensure that nations invest in interoperable equipment — capable of communicating, coordinating and operating together on a single battlefield. The war in Ukraine illustrated the lethal consequences of a lack of interoperability: incompatible weapons systems that slow the logistics chain and complicate allied support.

The goal of harmonizing defense standards within NATO — particularly for munitions, communication systems and command platforms — is a priority of the Ankara summit. Contracts signed at the NATO industry forum must account for this interoperability requirement, otherwise the "tens of billions" invested risk creating a siloed military wealth, incapable of coordinating in a real crisis.

What the 5% target means for deterrence

Spending more to make war less likely

The deep logic of the 5% target is not to prepare for an offensive war — it is to make aggression against NATO sufficiently costly to be deterring. Conventional deterrence works when the adversary calculates that the costs of an attack exceed the potential benefits. For that calculus to favor peace, NATO members must be perceived as credible, capable and determined to defend themselves.

The signal sent by the 5% commitment is precisely this message of credibility. Putin attacked Ukraine partly because he judged that the West would not respond with the necessary force. That calculation partially held — but only because Ukrainian resistance defied his predictions. If NATO members on the Eastern Flank have credible defenses and substantial military capabilities, the probability that such a calculation applies to them diminishes significantly.

Nuclear and conventional: a necessary complementarity

Nuclear deterrence remains NATO's ultimate shield — provided primarily by the United States, with French and British contributions in Europe. But nuclear deterrence alone does not cover the full spectrum of threats: a limited aggression, a hybrid provocation, a large-scale cyber attack or a "sub-nuclear-threshold" operation can only be deterred by credible conventional capabilities and non-nuclear responses. That is where the 5% target takes its full strategic value.

NATO's deterrence architecture for the 21st century must combine American nuclear protection, robust European conventional capabilities and responses to hybrid threats in the cyber, space and electromagnetic domains. The 5% target, with its two-tranche structure (3.5% military and 1.5% security), explicitly recognizes this multi-layered architecture. It is a sophisticated approach — if it is actually funded.

Conclusion: A historic commitment that binds the future

From declaration to reality

The 5% commitment made in The Hague in June 2025 and confirmed in Ankara in July 2026 represents the most profound transformation of Europe's defense posture since the end of the Cold War. This is not a slogan — it is a refounding of the budgetary, industrial and strategic priorities of an entire continent. The question is no longer whether Europe must invest in its defense. It now knows it has no choice. The real question is whether it will have the political discipline to sustain it over time.

The mechanism for this transition matters enormously. Without automatic triggers, credible commitment devices, and pre-positioned resources, the gap between declared ambition and operational reality will persist — and Russia will continue to exploit it.

Ukraine as the moral compass

Every deliberation on the 5% of GDP must be brought back to one reality: while experts debate percentages and accounting definitions, Ukrainian soldiers are dying to defend the values we claim to share. The 5% commitment is not an act of generosity — it is an act of collective survival and moral consistency. Either the West defends its vision of the world with the necessary means, or it cedes ground to those with different visions. There is no comfortable middle path in that choice.

Ukraine's war is the defining event that tests whether the West's stated values — sovereignty, democracy, the rule of law — have any operational content. The outcome of that test will shape the international order for a generation.

Assessment and outlook for 2029 and 2035

What NATO must deliver before the mid-term review

By 2029, NATO allies will need to demonstrate substantial progress on several indicators: the share of GDP devoted to defense and security, progress toward 3.5% military spending, the state of transformation of national defense industries, and the level of interoperability achieved. These indicators will be scrutinized at the mid-term review — and the results will feed political debates within the alliances and national parliaments.

The risk is that the positive dynamic of 2025–2026 loses momentum if geopolitical tensions temporarily ease — for example in the event of a ceasefire in Ukraine without a lasting resolution. Publics, relieved by an apparent easing of tensions, could push to reduce defense budgets. That is why the contractual structuring of commitments — through roadmaps, multi-year acquisitions and firm orders — is so important. It makes backsliding politically costly.

The stakes of allied cohesion

The cohesion of the 32 nations on the 5% trajectory will be one of the decade's most demanding tests. Every national election, every change of government, every economic crisis represents a risk of slowdown or backsliding. NATO will need to develop peer-pressure mechanisms and enhanced transparency to maintain cohesion over ten years. This is unprecedented in the history of the alliance. But the threat is, itself, unprecedented since the Cold War.

Europe's security is now being determined in the council rooms of finance and economics ministries just as much as in military headquarters and armaments factories. This is a new kind of war — a war for the seriousness of democracies, for their capacity to honor their commitments over time. That war, Europe cannot afford to lose.

By Maxime Marquette, columnist

Columnist's transparency note

My editorial positioning

I am resolutely in favor of increased European defense spending and a strong NATO. I regard the Russian threat as real and serious. These convictions shape my analytical framing. I acknowledge that there are legitimate positions more skeptical of military escalation as a response to geopolitical crises — but I do not share them on this specific topic.

I have tried to be rigorous in separating factual claims from normative arguments in this editorial. Where I argue for a particular course of action, I do so openly — not under the guise of neutral analysis.

My sources and their limits

Data on defense spending comes primarily from the NATO annual report (April 2026), the Atlantic Council Defense Spending Tracker (updated April 9, 2026) and official statements by Rutte and heads of state at The Hague summit. Projections on future spending are estimates based on declared trajectories — they may diverge from reality if political commitments are not honored.

I have not had access to the full NATO planning documents, alliance deliberations, or classified military assessments that would complete this picture. What I offer is an analysis grounded in the public record, informed by the strategic logic of the situation as I understand it.

Sources

Primary sources

NATO — Defence expenditures and NATO's 5% commitment — April 2026

Wikipedia — Agreement on 5% NATO defence spending by 2035 — documentation

Atlantic Council — NATO Defense Spending Tracker — April 9, 2026

Secondary sources

Atlantic Council — Experts react to NATO 5% target — June 25, 2025

SIPRI — NATO's new spending target: challenges and risks — June 27, 2025

Council on Foreign Relations — NATO agrees new defense spending target — June 25, 2025

Fox News — NATO allies agree to move toward 5% GDP defense spending — May 26, 2026

The American Legion — Hegseth puts allies on notice — June 18, 2026