At the NATO summit held in The Hague on June 25, 2025, alliance leaders agreed to a bold new defense spending target of 5% of GDP by 2035, a significant leap from the previous 2% benchmark set in 2014. The decision, heavily influenced by U.S. President Donald Trump’s persistent calls for increased contributions from European allies and Canada, aims to bolster collective defense amid growing geopolitical tensions, particularly with Russia. However, the inclusion of non-traditional expenditures like roads, bridges, and medical expenses under the umbrella of “military spending” has sparked debate about whether this is a genuine strategic shift or creative accounting to meet ambitious targets. Let’s dive into the details and examine how countries like the UK and Canada are navigating this new pledge.
The New 5% Target: A Breakdown
The 5% GDP target is split into two components: 3.5% for “core defense” spending, covering troops, weapons, and military equipment, and 1.5% for “defense-related investments” such as cybersecurity, infrastructure upgrades (e.g., roads and bridges for military use), and even medical preparedness. This broader definition allows flexibility for nations struggling to meet the core defense threshold, but it also raises questions about what qualifies as military spending. NATO Secretary-General Mark Rutte emphasized the need for this increase to counter threats from Russia, noting that Moscow’s military spending reached 7.1% of GDP in 2024. The alliance’s commitment to Article 5—collective defense—was reaffirmed as “ironclad,” despite earlier concerns about Trump’s ambiguous stance on the provision.
The summit’s communiqué, carefully worded to say “allies” rather than “all allies” commit to the 5% target, provided wiggle room for countries like Spain, which secured flexibility to spend less while still meeting NATO’s capability targets. This compromise, brokered after Spanish Prime Minister Pedro Sánchez’s last-minute objections, highlights the challenges of unifying 32 member states with diverse economic realities and political priorities.
UK: Balancing Defense with Domestic Pressures
The United Kingdom, one of Europe’s largest defense spenders, has endorsed the 5% target but faces significant hurdles in achieving it. In 2024, the UK allocated approximately $82 billion to defense, equating to 2.33% of GDP. Prime Minister Keir Starmer, elected on promises of fiscal restraint and no tax increases, has committed to a path toward 2.5% of GDP for defense but has not set a firm timeline for reaching 5%. Reports indicate the UK may seek a three-year delay to the 5% target due to economic pressures, including a national debt at its highest level since the 1960s.
To meet NATO’s new criteria, the UK is reportedly considering classifying infrastructure projects, such as upgrading roads and bridges to support military convoys, as part of its defense-related spending. Additionally, investments in emergency medical services and cybersecurity are being framed as “militarily adjacent” to bolster the 1.5% non-core portion of the target. Critics argue this approach dilutes the focus on traditional military capabilities, while supporters claim it reflects the modern realities of hybrid warfare, where civilian infrastructure plays a critical role. The UK’s cautious approach underscores the tension between NATO commitments and domestic priorities like health, education, and transport infrastructure.
Canada: Accelerating Spending with Creative Math
Canada, long criticized for lagging behind NATO’s 2% target, has made headlines with Prime Minister Mark Carney’s pledge to hit 2% this fiscal year, seven years ahead of the previous 2032 schedule. In 2024, Canada spent 1.37% of GDP on defense, roughly $36 billion. Carney’s ambitious plan includes an additional $2.5 billion in “defense and security” spending, but a closer look reveals that this figure incorporates funding for the Canadian Coast Guard, an unarmed civilian agency under the Department of Fisheries, as well as infrastructure upgrades like roads and ports.
Carney has framed this accelerated spending as a response to “new geopolitical threats” and a need to reduce reliance on U.S. defense guarantees. The inclusion of non-traditional expenses, such as medical preparedness and civilian infrastructure, aligns with NATO’s broader 1.5% category, allowing Canada to inflate its defense budget without solely focusing on tanks and jets. Defense analysts have welcomed the commitment but warn that Canada’s military faces significant equipment gaps, and the rapid ramp-up may strain procurement and industrial capacity. The move also reflects political pressure from Trump, who has threatened trade measures against low-spending allies.
Creative Accounting or Necessary Evolution?
The inclusion of roads, bridges, medical expenses, and cybersecurity in NATO’s 5% target has sparked debate. Proponents argue that modern warfare requires robust civilian infrastructure and resilience, citing Russia’s cyberattacks and sabotage in Europe as evidence. Upgrading transport networks to handle heavy military equipment and strengthening medical systems for wartime readiness are seen as critical to collective defense. NATO’s own estimates suggest that defending Europe against a Russian attack requires at least 3% of GDP in core spending, with additional investments to address logistical vulnerabilities exposed by the Ukraine war.
However, critics contend that classifying civilian projects as military spending risks diluting the alliance’s combat readiness. Countries like Spain, which spent just 1.28% of GDP on defense in 2024, have leveraged the flexible definition to avoid steep increases in core military budgets. Spain’s deal to meet capability targets with only 2.1% of GDP has raised concerns that other nations, such as Belgium and Luxembourg, may follow suit, undermining the 5% goal’s intent. Belgium’s Prime Minister Bart De Wever, for instance, acknowledged budgetary constraints similar to Spain’s, while Luxembourg’s leader emphasized gradual increases over firm commitments.
Geopolitical Context and Trump’s Influence
The push for higher spending comes against a backdrop of heightened tensions with Russia, whose war in Ukraine has galvanized European NATO members to bolster defenses. Since 2022, European allies have increased spending from 1.4% of GDP in 2014 to 2% in 2024, driven by fears of Russian aggression. Trump’s rhetoric, including threats to not defend allies failing to meet targets, has added urgency to these efforts. At the summit, Trump hailed the 5% pledge as a “big win for Europe and Western civilization,” while singling out Spain for criticism and suggesting the U.S. should be exempt from the target due to its historical contributions.
NATO’s focus has shifted firmly back to collective defense, with Ukraine’s potential membership sidelined. Ukrainian President Volodymyr Zelenskyy, once a central figure at NATO summits, was relegated to side events in The Hague, reflecting Trump’s stance against Kyiv’s immediate integration. Meanwhile, concerns about U.S. reliability under Trump have prompted Europe to prepare for reduced American troop presence, further justifying the spending hike.
Conclusion: A Test of Commitment
NATO’s 5% defense spending target is a bold response to a volatile global landscape, but its success hinges on whether allies can balance ambition with accountability. The UK and Canada’s inclusion of roads, medical expenses, and other non-traditional expenditures highlights the creative approaches being used to meet the pledge. While these investments may enhance resilience, they also risk diluting the focus on core military capabilities at a time when NATO faces existential threats. As the alliance reviews progress in 2029, the world will be watching to see if this historic commitment delivers a stronger, more unified NATO—or merely a lesson in creative accounting.
If countries are willing to charge carbon taxes and allocate the money to pet projects, creative accounting for NATO will be a real issue. The Key is we need to define Article 5 so the United States does not get pulled into a war by the neocons in the U.S. and the EU. They are using wars to fund their control over populations, and this needs to stop.
Sources:
-
OilPrice.com, “NATO Leaders Set Ambitious 5% Defense Spending Target”
-
Reuters, “What is NATO’s new 5% defence spending target?”
-
The New York Times, “Canada Commits Billions in Defense Spending to Meet NATO Target”
-
CNBC, “NATO wants allies to spend 5% of GDP on defense”
-
The Globe and Mail, “NATO countries agree to increase defence spending to 5%”
-
BBC, “The Nato countries that missed their defence spending targets”
Energy News Beat is committed to delivering hard-hitting analysis on global energy and geopolitical trends. Stay tuned for more updates on how defense spending impacts energy markets and international stability.
