NATO's new 5% defence spending target and what it means
NATO leaders are set to endorse a sweeping increase in defence investment at a key summit in The Hague on Wednesday (June 24), responding to rising geopolitical tensions and direct pressure from US President Donald Trump. The landmark agreement would commit member states to spending 5% of their Gross Domestic Product (GDP) on defence and security-related investments by 2035—a significant jump from the current 2% benchmark.
The proposed 5% spending goal will be divided into two parts:
3.5% of GDP on core defence, including troops, weapons systems, and combat readiness—up from the current 2% focus.
1.5% of GDP on broader security investments, such as cyber defence, infrastructure upgrades for military mobility, and energy security.
This broader definition reflects modern security challenges, including the need to defend against hybrid threats and safeguard strategic supply chains.
While 22 of NATO's 32 members already meet or exceed the 2% defence target, the new 5% threshold presents a major leap. In 2024, NATO countries collectively spent 2.61% of GDP on defence, though with wide disparities—Poland exceeded 4%, while Spain lagged at under 1.3%.
If all members had spent 3.5% on core defence last year, total spending would have surpassed $1.75 trillion, compared to the $1.3 trillion actually spent.
Member states are expected to meet the new target by 2035, with a review scheduled for 2029 to evaluate progress and potentially adjust expectations.
The decision is driven by a combination of:
Russia's ongoing war in Ukraine and fears of a broader military threat within the next five years.
Concerns over a potential drawdown of US forces in Europe, especially if Trump returns to the White House.
A broader reassessment of Europe's ability to defend itself.
'NATO must prepare for a future in which it has to take on more responsibility,' Secretary-General Mark Rutte said, pointing to urgent needs in air defence, tanks, drones, and personnel.
While the agreement appears to have broad support, some nations are expressing reservations. Spanish Prime Minister Pedro Sanchez has said Spain will only aim for 2.1% of GDP, even though his government signed off on the final communiqué.
Despite such statements, NATO insists there are no opt-outs, and national defence spending will be closely monitored.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
26 minutes ago
- Hindustan Times
Trump must offer Iran more than bombs, rage and humiliation
DONALD TRUMP was elected to keep America out of foreign wars. But on June 22nd American forces joined Israel's campaign against Iran, striking three nuclear sites. The president's task now is to press Iran's leaders into avoiding a ruinous regional escalation and, as a complement to that, to persuade them to abandon any thought of trying to get a nuclear weapon. Neither will be easy. America's assault, early on Sunday morning local time, involved waves of B-2 bombers repeatedly attacking facilities at Fordow and Natanz. Submarine-launched cruise missiles also struck Isfahan. Mr Trump hailed the success of the mission, saying that Iran's programme had been 'completely and utterly obliterated'. He also warned Iran not to retaliate. The bombing raid appears to have done serious damage to the three sites, but the president cannot be sure how much—not even Iran will have yet had time to assess its full extent. He is certainly right to be worried about Iranian retaliation. That risk explains why The Economist argued that rushing in was the wrong choice for America. We feared that the tradeoffs were, on net, negative: bombing would set back Iran's programme by an uncertain amount, but Iran, its proxies or terrorist cells could go on to kill American troops and civilians, terrorise the Gulf states and send energy prices soaring by, say, making the Strait of Hormuz too dangerous for tankers. Now that Mr Trump has rushed in, he must minimise the chances that the region spirals out of control. Fortunately, the strike itself appears designed to do just that. In the past nine days Israel has attacked a range of targets that are political, military and economic, as well as nuclear. It has also suggested that it might seek to trigger regime change. America, by contrast, focused exclusively on nuclear sites, some of which are thought to be beyond the reach of Israel's air force. Mr Trump has made clear that he is not attempting to overturn the regime—at least for as long as Iran shows restraint. Mr Trump should urgently turn to diplomacy. In his address he declared that 'now is the time for peace'. If he means what he says, he should immediately offer Iran an alternative that leads away from launching retaliatory missile strikes at American bases and Arab states. That means following up on the call by Pete Hegseth, the secretary of defence, to get Iran to return to talks about its programme. These would be more likely to get under way if, while insisting that Iran give up its stocks of enriched uranium and submit to intrusive international inspections, Mr Trump was open to the principle that Iran can have some enrichment capacity, probably as part of a regional consortium that operates outside the country. If Mr Trump fails to seize the moment, Iran will be more likely to redouble its efforts to become a nuclear-weapons power, in an even more clandestine fashion. A first, unwelcome step would be for it to say that it was leaving the Nuclear Non-Proliferation Treaty (NPT). This would signal that the effect of American and Israeli bombing was to inflame its nuclear ambitions. Quitting the NPT would also put future efforts beyond the scrutiny of inspectors from the International Atomic Energy Agency (IAEA). Nobody knows whether the regime has managed to stash enriched uranium and key components before America and Israel attacked. After the damage from the attacks, the IAEA will never be able to account for Iran's stocks. If Iran restarts its programme, progress towards a bomb could span several years, or it could be rapid. Either way, America will face the prospect of repeatedly having to help Israel strike it, or—as Sunday's mission suggests—doing the job itself. One motive for Iran to punish America today would be to complicate such future operations by showing that they carry a cost. The immediate offer of talks could help reduce any Iranian retaliation to face-saving strikes. If so, Mr Trump should ignore them and press Iran to come to the table. And lastly, Mr Trump should launch a drive to shift the Middle East out of a pattern of continual war. With this bombing, he has badly shaken his Arab allies. After his visit to the Gulf in May, they came to believe that he would restrain Israel while he continued to negotiate. The prospect of repeated attacks on Iran by Israel supported by America is a grave threat to their vision of a region that finds peace through prosperity. Mr Trump should attempt to rebuild trust using his new influence over Israel. Having helped its prime minister, Binyamin Netanyahu, by bombing Fordow, Mr Trump now enjoys unprecedented leverage over him. He should apply this not just to end the attacks of the Israeli air force on Iran—where it is anyway running out of nuclear targets—but also to get it to immediately end the war in Gaza, where it has reduced Hamas to ashes at the cost of tens of thousands of Palestinian lives. There has never been a more propitious moment for a comprehensive peace plan, nor a more urgent one—including for the Palestinians. In the past 20 months Israel has devastated Iran's malign control of a crescent of militias and client regimes in the region. Now it has weakened the other pillar of its defiance of America and the West: its nuclear programme. Iran was always an obstacle to the 'prosperity agenda' of the Gulf states. Now is a good time to discover if that has changed. Even if Mr Trump offers all this, Iran could nonetheless prefer to cause mayhem. Its leaders have just been humiliated. They were already unpopular at home, and have now left their people open to attack. The regime may calculate that, if it does not strike back, the coming months could bring a palace coup or a challenge from the streets. That would put America in a quandary. If Iran killed a lot of Americans Mr Trump would be forced to respond. His war aims would shift to requiring Iran to stop attacking, or even to demanding regime change. And yet, using air power alone, even America would struggle to impose either of those. An operation with the welcome aim of stopping nuclear proliferation could thereby end up accelerating it. How much better for Mr Trump, after a dazzling display of American power, to pour all his efforts into seeking diplomacy without delay. Subscribers to The Economist can sign up to our Opinion newsletter, which brings together the best of our leaders, columns, guest essays and reader correspondence.
New Indian Express
26 minutes ago
- New Indian Express
Trump says Iran and Israel have agreed to a phased-in ceasefire over next 24 hours
Trump's announcement comes just before he leaves Tuesday for a NATO summit in the Netherlands, where he will likely make the case that his mix of aggression and diplomacy has succeeded. Never shy to suggest he deserves the Nobel Peace Price, Trump went so far as to give the conflict between Israel and Iran the name of the '12 day war,' a title that seemed to reference the 1967 'Six Day War' in which Israel fought a group of Arab countries including Egypt, Jordan and Syria. As Trump described it, the ceasefire would start with Iran and then be joined by Israel 12 hours later, with the president writing that the respective sides would 'remain PEACEFUL and RESPECTFUL.' The phased-in ceasefire was set to begin at roughly midnight Washington time and culminate within 24 hours. 'This is a War that could have gone on for years, and destroyed the entire Middle East, but it didn't, and never will!' Trump said. The exact terms of the ceasefire other than the timeline provided by the Trump remained to be seen. On Sunday, the Trump administration had insisted that Iran abandon its program to enrich uranium for possible use in nuclear weapons as a condition of any lasting peace. While the bombings of the Fordo, Natanz and Isfahan facilities were a powerful show of force, it remained uncertain just how much nuclear material Iran still possessed and what its ambitions would be going forward.
Hindustan Times
31 minutes ago
- Hindustan Times
Fierce hardliners are grabbing power in Iran
ON JUNE 23rd Iran's regime ignored President Donald Trump's warnings and attacked American military bases in Qatar and Iraq. Missiles could be seen over skyscrapers in Doha, Qatar's capital. While the damage and casualties appear minimal, the war has reached the Gulf, whose glimmering cities offer an alternative vision of the Middle East and whose energy the world needs. The strikes outside Iran come alongside a sudden, ominous power shift inside it. Military hardliners are grabbing power from clerics. That could mean they try to extricate themselves from the war now in order to fight another day. But in the medium term it could signal that the regime becomes more extreme, not more pragmatic, under the pressure of a devastating military campaign. PREMIUM This handout picture released by the office of Iran's Supreme Leader Ayatollah Ali Khamenei shows him speaking to members of Iran's air force in Tehran on February 7, 2025. (AFP) One reason for this shift is that Iran's elite fears it is in a struggle to preserve the country's political system. Mr Trump has signalled he might approve the overthrow of the clerical-military order. 'Why wouldn't there be a regime change,' he asked on June 22nd. Strikes against non-nuclear targets have galvanised elements of an outraged Iranian public behind the regime. But most important of all, there has been a shift in who holds power at the top as a result of the war. The military men have gained ascendance over the religious clerics for the first time since Iran's revolution in 1979. And they are not moderate. Iran's supreme leader, Ayatollah Ali Khamenei, is 86, and for years there has been speculation about succession, although who might gain the upper hand has been far from clear. The war is changing that, turbo-charging a power shift to the regime's military arm, the Islamic Revolutionary Guard Corps (IRGC). In the first days of the fighting Mr Khamenei, ageing and isolated for his own safety, disappeared from the scene like the Shias' hidden Imam. He delegated decision-making to a new council, or shura, dominated by the IRGC. 'The country is in effect under martial law,' says an observer. As the IRGC gains control its elite is being transformed at speed by Israel's assassinations. Gone are the veteran commanders who for years pursued 'strategic patience', limiting their fire when their totemic leader, Qassem Soleimani, was assassinated in 2020, and holding it when Israel battered their proxies, Hamas and Hizbullah, in 2024. Now a new generation, impatient and more dogmatic, has taken their place and is bent on redeeming national pride. 'The maximalist position has been strengthened,' says an academic close to the reformist camp. He claims the decision-makers in place before the war were debating whether to ditch their anti-Israel stance. But 'everyone is now a hardliner'. Compounding the generational shift is a newfound cohesion in a military-industrial complex renowned for paranoia and scheming. A year ago the regime was rocked by infighting. Businessmen, military professionals and ideologues battled for supremacy inside the IRGC. Hardliners chased pragmatists from state institutions. Rival factions blamed each other for the death of the country's president in a mysterious helicopter crash in 2024. Now they appear to be coalescing against a common foreign enemy. How much public support does this emerging new power configuration enjoy? Many Iranians rue the billions of dollars their generals squandered on two decades of pointless proxy wars and even now some in Iran are describing the Israeli-American strikes as chemotherapy to remove cancerous cells. Increasingly, Israeli bombardments seem designed to tap into this seam of dissent and destabilise the country. Recent targets in Tehran include the police headquarters and the entrance to Evin, Iran's jail for its most prominent political prisoners. Yet in parallel the war has triggered a nationalist surge and narrowed the gap between ruler and ruled. No one has responded to calls from Binyamin Netanyahu, the Israeli prime minister, or Reza Pahlavi, the royalist pretender, for a popular uprising. Early admiration for Israel's military prowess has turned to outrage as its targets have widened and the death toll has mounted. Scorn for the IRGC's haplessness has turned to pride at the speed with which it has reconstituted. Iranians who fled the capital are coming back. Those who once championed Israel are now handing over suspected Israeli agents to the police. Female political prisoners, the mothers of executed protesters and exiled Iranian pop stars have all issued calls to rally to Iran's defence. 'It's backfired on Bibi,' says a former official turned dissident, using the nickname of Mr Netanyahu. The shift at the top could dramatically alter decision-making in Iran. Hardliners have always been against talks with America. They remember Muammar Qaddafi, the Libyan dictator, who surrendered weapons of mass destruction in exchange for a lifting of sanctions, and Saddam Hussein, who granted UN monitors unfettered access to Iraq. Both were toppled by Western interventions. Now even moderates feel burned: the last round of talks with America, set for June 15th, fooled them into lowering their guard just as Israel attacked. More could be to come. Within hours of America's strike, Iran's foreign minister, Abbas Araghchi, warned of 'everlasting consequences'. Iran's parliament has voted to close the Strait of Hormuz, a chokepoint through which 30% of maritime oil supplies flow (its vote is not binding). It is also considering a bill requiring Iran to withdraw from the Nuclear Non-Proliferation Treaty and cut co-operation with the UN's nuclear watchdog, the International Atomic Energy Agency. The big question is whether the regime now pauses or pursues something worse. Some had sought to downplay the fallout from America's bunker-busting strikes on Fordow and two other sites, perhaps to buy time and a greater margin of manoeuvre in firing back. While Donald Trump celebrated the 'monumental' obliteration of Iran's main nuclear sites, Iran's leaders initially pointed to the absence of radiation and questioned their efficacy. America's bombs were only twice as big as those used by Israel to hit the bunker of Hizbullah's leader in Beirut last year, and Fordow's chambers lay 25 times deeper than that. But without a trusted mediator and no obvious off-ramp the more sober-minded appear to have been pushed aside. Many generals are eager to maintain their strikes on Israel which, they argue, have punctured its aura of invincibility. Israel's destruction of half their missile launchers has slowed the rate, they admit. But more advanced systems, perhaps launched from the sea, are to come, says Mohsen Rezaei, a former IRGC commander. A growing caucus advocates dashing for a bomb. In the run-up to the American attack, Iran removed stockpiles of enriched uranium, and perhaps centrifuges from the targeted sites, claims an insider. Satellite imagery from June 20th shows a queue of trucks at Fordow's gate. Some are suggesting detonating a nuclear device to prove Iran's capability. Others advocate dropping a warhead coated in weapons-grade uranium on Tel Aviv. 'Sure as anything they will be going for a nuke. It's absolutely disastrous,' laments a Gulf mediator. The shift from religious to military authority has some advantages. Ayatollah Ruhollah Khomeini, the original leader of Iran's revolution, warned against allowing the IRGC into politics, fearful they might dispense with his theocracy. With the clerics confined to their seminaries, there might be an easing of the regime's religious strictures. In recent days state television has shown women with hair poking out from their headscarves. But the prospect of Iran being ruled by its new shura indefinitely has other consequences, not least an even more militarised state hellbent on defiance and reprisals, and more ruthless in tamping down internal dissent. The outside world has often assumed that Iran's regime exhibits reckless risk-taking and belligerence because it has been run by religious men. The danger is the military men are worse. Sign up to the Middle East Dispatch, a weekly newsletter that keeps you in the loop on a fascinating, complex and consequential part of the world.
