Germany Backs NATO’s 5% Defense Spending Goal as Italy, Spain Lag

Germany’s government, led by Chancellor Friedrich Merz, confirmed its support for NATO’s proposed 5% GDP defense spending target by 2032, a decision announced by Foreign Minister Johann Wadephul at a NATO meeting in Antalya, Turkey, on May 15, 2025.

This move responds to U.S. President Donald Trump’s demand for higher contributions. Meanwhile, Italy and Spain struggle to meet the existing 2% NATO target.

Germany currently allocates €90 billion annually, or 2.1% of GDP, to defense. Achieving 5% requires raising this to €160 billion by 2032, a massive leap necessitating constitutional changes to ease debt limits.

Merz sees this as a chance to boost Germany’s stagnant economy, with each 1% GDP increase adding €45 billion in spending. However, critics warn that Germany’s 3% budget deficit and 65.4% debt-to-GDP ratio could strain public finances.

Trump’s push for 5% stems from frustration over Europe’s reliance on U.S. military support. NATO’s proposed “3.5+1.5” formula allocates 3.5% to direct military costs and 1.5% to infrastructure and cybersecurity.

NATO’s Defense Spending Shift

Germany’s commitment signals an effort to maintain U.S. support for NATO’s mutual defense clause amid fears of American withdrawal. Russia’s 2022 invasion of Ukraine, which drove its defense spending to 6.7% of GDP, further fuels urgency.

Italy and Spain, spending 1.5% (€29.7 billion) and 1.28% (€17.2 billion) of GDP respectively, aim for 2% by 2028 and 2027. High public debt—140% of GDP for Italy and over 100% for Spain—limits their flexibility.

Both nations face domestic pressure to prioritize social programs, complicating NATO commitments. Spain’s Prime Minister Pedro Sánchez and Italy’s Giorgia Meloni emphasize balancing defense with economic stability.

NATO’s 2024 data shows only 23 of 32 members meet the 2% target, with Poland at 4.12% leading Europe. The U.S. spends 3.38%, far below Trump’s 5% demand.

NATO Secretary General Mark Rutte’s compromise plan, set for discussion at the June 2025 Hague summit, aims to phase in the 5% goal gradually.

Eastern European nations, like Estonia at 5.4%, strongly back higher spending due to Russian threats. Germany’s pledge reshapes European security, potentially strengthening its defense industry and economy.

Yet, Italy and Spain’s slower progress highlights fiscal constraints. The Hague summit will test NATO’s ability to unify its members’ commitments, balancing Trump’s demands with economic realities.

This shift underscores a mercantile focus: nations prioritize self-interest, weighing defense investments against domestic needs in a volatile geopolitical landscape.