NATO Hits 2% Spending Milestone but Struggles on New 3.5% Target

All NATO allies will meet the longstanding 2% defence spending benchmark in 2025, a milestone that marks a sharp turnaround from just a year earlier, when more than 10 members fell short. The surge reflects both Russia’s full-scale invasion of Ukraine in 2022 and persistent pressure from Washington for Europe to take greater responsibility for its own security.

A Shift After Years of Shortfalls

The 2% guideline was set in 2014, but progress was uneven. Estimates released Thursday show seven members now at exactly 2%, with several others only slightly above the threshold. Poland leads the alliance at 4.48%, with Lithuania and Latvia not far behind, making them the only states to clear the 3.5% target adopted in June at NATO’s summit in The Hague.

Rutte’s Warning at Rheinmetall Factory

Speaking in Unterlüß, Germany, where Rheinmetall opened a new ammunition plant, NATO Secretary General Mark Rutte praised the progress but warned against complacency. “Cash alone doesn’t provide security,” he said. “Deterrence doesn’t come from 5%. Deterrence comes from the capability to … fight potential enemies.” His comments underline concerns that rapid increases in budgets must be matched by industrial production, training, and operational readiness.

Why This Matters

The announcements come as NATO celebrates its 75th anniversary amid wars in Ukraine and Gaza, escalating competition with China, and rising instability across Africa. While the 2% milestone marks a political success, the road to 3.5% — and especially to 5% — will test European economies already strained by inflation and energy costs. The debate over burden-sharing, once driven largely by U.S. demands, has now become central to Europe’s own sense of security, with countries such as Türkiye also forced to balance domestic needs against rising defence bills.