NATO's 5% pledge: Rearming the West or rebalancing the world

Economic Times

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In an era where geopolitical boundaries are blurred and warfare has morphed from trenches to tech, NATO 's recent commitment to invest 5% of GDP annually in defence by 2035 sends a thunderous signal—not just to adversaries, but to allies questioning the alliance's strategic relevance. The Hague Summit Declaration, adopted by 32 member states, marked a pivotal moment in transatlantic security thinking. The question now is whether this is a forward-looking strategy or a reactionary bulwark clinging to the past paradigms.At the core of the declaration lies an emphatic reaffirmation of Article 5—the principle that an attack on one NATO member is an attack on all NATO members. However, the real headline is the proposed ramp-up in defence and security-related spending: 3.5% of GDP earmarked for traditional defence infrastructure and capabilities, and an additional 1.5% for resilience, critical infrastructure protection, and innovation. This is a fundamental reset of NATO's budgetary posture, reflective of a world no longer anchored to the certainties of post-Cold War peace.The strategic rationale behind this move is evident in the literature. From Russia's protracted war in Ukraine to hybrid warfare tactics deployed through cyberattacks, misinformation campaigns, and economic coercion, the threats facing the Euro-Atlantic region are no longer just physical; they are systemic. However, the implications of NATO's new doctrine stretch far beyond Europe.By including Ukraine's security under the umbrella of NATO's own, the alliance is signalling that Kyiv's stability is no longer peripheral—it is central to the European defence architecture. Although the declaration stops short of directly naming Russia as an aggressor, it unequivocally categorises it as a long-term threat. The political calculus here is clear: to maintain unity among diverse member states while advancing a credible deterrent posture.However, pledging 5% of GDP—especially in times of economic uncertainty, rising public debt, and shrinking fiscal room—will not be without domestic blowback. For many European countries, where defence budgets have long played second fiddle to social spending, the pivot will require not only financial reallocation but also political will. The path to 2035 will be fraught with parliamentary debates, economic trade-offs, and inevitable scrutiny from taxpayers questioning the utility of militarisation during peacetime.That said, NATO's blueprint smartly distinguishes between "hard power" and 'soft shield' spending. By allocating up to 1.5% for cyber defense , critical infrastructure, industrial innovation, and civil preparedness, the alliance acknowledges the multidimensional nature of modern warfare. Drones, AI, satellite technologies, and quantum encryption will define future battles. This is NATO's attempt to future-proof itself.Another compelling aspect of the declaration is its call to dismantle internal defence trade barriers and catalyse transatlantic industrial cooperation. The subtext? Europe's dependence on American defence systems must evolve into a mutual technological collaboration. With U.S. domestic politics becoming increasingly isolationist and polarised, especially in light of looming electoral uncertainties, Europe has no choice but to shoulder more of the strategic burden of NATO.The timing of this declaration cannot be ignored. This occurs at a time when questions are being raised about the longevity of American leadership and the cohesion of Western alliances. Populist politics, migration crises, climate-induced conflicts, and digital disruptions are redrawing the map of security concerns. In this light, NATO's 5% commitment is as much about deterrence as it is about staying relevant.However, for all its ambition, the declaration raises a philosophical question: can militarised investment alone secure peace in a world where most battles are fought in cyberspace, legislatures, and courtrooms? While NATO shores up its arsenal, adversaries weaponize currency systems, manipulate public opinion through AI-generated propaganda, and infiltrate supply chains. In such a scenario, defence must be defined not only by missiles and manpower but also by legal resilience, technological agility, and economic fortitude.In its closing remarks, the summit's declaration looks ahead—to Türkiye in 2026 and Albania thereafter. Symbolically, this eastward shift in NATO meeting venues reflects a changing strategic frontier. The frontlines are no longer confined to the Fulda Gap but extend into the Black Sea, Indo-Pacific, and digital cloud networks connecting us all.Ultimately, NATO's 5% pledge is more than just a budgetary item. It is a test of collective resolve in a fractured global order. If implemented wisely—with strategic clarity, equitable burden-sharing, and an eye on emerging threats—it could become a blueprint for securing liberal democracies in a multipolar, volatile world. But if the focus remains confined to tanks and treaties while ignoring the algorithmic and institutional battlefields of the 21st century, NATO risks building a fortress for yesterday's warThe author is Department of Commerce, Assistant Professor and Research Supervisor, St. Thomas College (Autonomous), Thrissur, Kerala