Hot NATO idea signals start of the second Cold War

Time of India

4 hours ago

When World War II ended in 1945, it left much of the world in ruins, except for one nation. The United States emerged not just victorious, but ascendant. Its unmatched military and economic power laid the foundation for what came to be known as Pax Americana, a US-led global order marked by liberal democracy, open markets, and an implicit security guarantee underpinned by American force.
For decades, this system delivered a fragile but functional peace, especially across the Western Bloc during the Cold War (1947 to 1991). Even as the world split into rival camps, Pax Americana held firm within its sphere of influence, backed by
NATO
, bilateral pacts, and institutions like the IMF and
United Nations
.
But now, after Russia's full-scale invasion of Ukraine in 2022 and a fracturing global consensus, the foundational assumptions of that order are cracking. Peace in the West is no longer a given; countries must now make efforts to secure it. And nowhere is that shift more visible than in NATO's bold new defence posture.
by Taboola
by Taboola
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What is NATO's new 5% defence spending target?
At its latest summit in the Netherlands, the alliance agreed to a sweeping rearmament plan: a new target of 5% of GDP for defence and security spending, replacing the longstanding 2% goal. It's a move that recalls the early Cold War years, when fear of Soviet aggression drove defence budgets to historic highs, and it may well mark the start of what some would call the second Cold War.
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'Russia could be ready to use military force against NATO within five years,' NATO Secretary-General Mark Rutte warned earlier this month.
'We had a great victory here,' declared US President
Donald Trump
after the summit, after having pushed allies long to spend more. 'I hope the additional funds will be spent on military hardware made in the US.'
The message is clear: NATO no longer assumes peace; it is preparing for conflict.
NATO's big defence pivot
NATO's big shift in
defence spending
target, covering both conventional military and hybrid warfare capabilities, goes beyond a routine policy shift. At its annual summit in The Hague this week, NATO leaders endorsed the groundbreaking framework.
Under the plan, members are expected to allocate 3.5% of GDP to core military defence, covering weapons, troops, and equipment, and an additional 1.5% to broader security infrastructure, including cyber defences, energy pipeline protection, and transport routes adapted for rapid troop deployment.
While the commitment is to be fulfilled by 2035, its symbolism is immediate and potent, signalling the end of post–Cold War optimism.
The previous NATO benchmark, 2% of GDP, agreed upon in 2014 in response to Russia's annexation of Crimea, was rarely met. As of 2023, only 11 of NATO's 32 members met it. By 2024, that number rose to 22, largely due to the escalating Ukraine war.
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The new 5% target marks a dramatic increase. As per Reuters, if all NATO countries had spent 3.5% of GDP on core defence in 2024, it would have translated to $1.75 trillion, up from the actual $1.3 trillion that year (itself a jump from about a trillion a decade earlier, in constant 2021 prices). Including the additional 1.5% on broader security infrastructure, total spending would have exceeded $2.2 trillion, a nearly 70% rise from current levels.
Echoes of Cold War spending
NATO has seen such spending surges before. Between 1949 and 1985, defence expenditures climbed sharply during Cold War peaks. According to the bloc's official data, the US increased its nominal defence budget from $13.5 billion in 1949 to $266.6 billion in 1985. NATO Europe's combined total rose from $8.4 billion to $86.8 billion in the same period, with countries like Germany, the UK, and France significantly boosting their military outlays in response to Soviet pressures.
By 1985, defence spending as a share of GDP closely resembled today's emerging trend. The US allocated 6.9% of its GDP to defence, while NATO Europe averaged 3.8%. Greece spent 7.1%, and both the UK and Turkey reached 5.4%.
These levels shows the significance of NATO's new 5% target, signalling a return to Cold War norms. Throughout that era, European
NATO members
routinely spent 3.5–4% of GDP on defence, with Greece and the UK often exceeding 5%. The US, meanwhile, regularly surpassed 6%, peaking at 16.9% in 1952 during the Korean War.
(Note: The 5% target refers to national defence spending, not contributions paid directly to NATO).
The collapse of Pax Americana
For nearly eight decades, Pax Americana, peace under US hegemony, anchored the global order. Forged after World War II through efforts like the Marshall Plan and NATO, it paired military might with economic aid and multilateralism. While initially limited to the Western sphere, the post-1991 unipolar moment saw the US expand its influence globally with few credible rivals.
That world no longer exists.
In 2024, global military spending reached $2.718 trillion, a 9.4% jump over 2023 and the biggest annual increase since the waning years of the Cold War in 1988, according to the Stockholm International Peace Research Institute (SIPRI). Military budgets now account for 2.5% of global GDP, signalling a shift from diplomacy to deterrence.
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Russia's 2022 invasion of Ukraine, the largest land war in Europe since World War II, upended the West's post–Cold War security architecture. In 2024, Russia's defence budget surged 38% to $149 billion, nearly double its share of GDP from 3.6% in 2021 to 7.1% now. The Kremlin isn't just fighting a war; it's militarising its economy for the long haul.
Meanwhile, Ukraine's military spending reached $64.7 billion in 2024, a staggering 34% of GDP, driven almost entirely by NATO aid, weapons and training.
In Europe, Poland has emerged as NATO's front-line heavyweight. Its defence allocation has doubled, from 2.2% of GDP in 2022 to 4.2% today.
Defence budgets in 2024 (SIPRI):
United States: $997 billion (+5.7% YoY) — 66% of NATO's total
Germany: $88.5 billion (+28%)
Poland: $38.0 billion — 4.2% of GDP (+31%)
UK: $74.9 billion — 2.3% of GDP
Spain: $18.7 billion — 1.3% of GDP
NATO Europe & Canada (combined): $485 billion — 2.02% of GDP
The global arms surge
China, in 2024, spent $296 billion, just 1.7% of GDP, but remains the second-largest military spender globally, with a focus on naval dominance and technological edge.
In the Middle East, Israel's military spending jumped 65% to $46.5 billion in 2024, driven by its war with Hamas and tensions with Iran. Defence now accounts for 8.8% of its GDP, twice the level in 2022.
Lebanon, caught in a shadow conflict with Israel, raised its defence budget by 58%, from 1.6% to 2.6% of GDP in a single year.
Return to Cold War logic
As the Council on Foreign Relations notes, US defence spending has ranged from 15% of GDP during the Korean War in 1952 to just 3.7% in 2000. European allies frequently spent more than 3% in the Cold War years, most likely motivated by the fear of Soviet invasion.
That pessimism has returned, not necessarily involving the same adversary, but with familiar dynamics: proxy wars, bloc formation, alliance cohesion, industrial mobilisation and civil readiness. Cold War logic is back with 21st-century urgency.
NATO's 5% pivot is more than a spending surge. It's a strategic reset, a return to blocs, hard power and zero-sum security. Whether this marks a second Cold War or something more dangerous remains to be seen.
But one thing is clear: peace now comes with a price tag. And if the 5% goal is achieved, it will mark the most dramatic rearmament of Europe since the 1980s.