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NATO’s 5% defense mandate exposes Europe’s creative accounting

Under the terms of a new agreement, NATO members are on the hook to spend 5% of their GDP on defense. For the Trump administration, the agreement reached at a NATO Summit in the Hague marks the most serious push in decades to get Europe to shoulder its own security.

European leaders, however, are scrambling to meet — or at least appear to meet — the new benchmark.

Many have already signed on to the larger budgets in principle, but the reality is far murkier.

From Paris to Berlin, much of Europe’s political class is quietly hoping Mr. Trump will look the other way. That may be wishful thinking, as Washington’s tolerance for Europe’s half-measures is wearing dangerously thin.

“Many European politicians believe the spending pledge is not realistic for all NATO countries to reach by 2035,” said Shary Mitidieri, a former NATO political adviser and academic in Italy, “and some of those countries are getting creative in how they are looking to meet the 5% commitment indirectly.”

Ms. Matidieri points out that in Italy, the government of Prime Minister Giorgia Meloni initially sought to cast a proposed bridge linking Sicily to mainland Italy as part of the defense spending.

U.S. Ambassador to NATO Matthew Whitaker last week said new defense spending should not include “bridges that have no strategic military value.”

NATO formally committed to a 5% of GDP security spending target at the 2025 NATO Summit in The Hague this summer.

First, some 3.5% of that figure is intended to be core defense spending, which includes weapons, salaries, and equipment. A further 1.5% of GDP is to be set aside for critical infrastructure, civil defense, and cybersecurity. Measures that are meant to increase European defence resilience in the threat of war.

For Belgian General Marc Thys, the United States’ call for increased European defense spending is nothing new. Now retired, the general spent nearly five decades in uniform and is now an advocate for European rearmament.

“Since the beginning of my career during the administration of President Ronald Reagan, the United States has been consistent in calling for Europe to spend more on defense,” Mr. Thys said.

He adds that for the first time since World War II, Europe is spending more on defense procurement for NATO than the United States.

Europe’s NATO members spent $170.1 billion on procurement as opposed to $167.7 billion for the United States, according to Mr. Thys.

“European countries are slowly catching up,” he said. “Europe is not a country, and there is diversity in how that money is being spent. But, there will be more defense spending over the next 10 to 15 years in line with NATO goals.”

There are clear regional differences in the response to the new agreement.

The Scandinavian states, the Baltic states, and Poland — all states that border Russia — have responded to the pledge most vigorously..

“Meanwhile, Hungary and Slovakia have comparatively lagged a little behind,” Mr. Thys said.

Spain and Belgium have been vocal critics of the new pledge. However, Belgium has charted a new course more recently.

“In [Belgium], the tables have turned: the minister of Defence and the government have committed to raising defense spending to 2% … a fundamental shift in policy,” he said.

Another country whose leader has changed course is Germany, where Chancellor Friedrich Merz has thrown his support behind boosting defense spending.

Earlier this year, Mr. Merz voiced his opposition to the new NATO spending targets, saying they were “basically irrelevant.” However, in power, Mr. Merz has committed to the 5% goal.

Some of the new defense spending across Europe will benefit American companies. For example, British Prime Minister Keir Starmer recently committed to purchasing 12 F-35A jets with nuclear delivery capability.

Across the continent, Poland is spending heavily on U.S. combat systems, including Abrams Tanks and Patriot missiles.

However, more than in previous rounds of defense spending, there is a greater emphasis on Europe developing domestic capabilities that will wean it from its exclusive reliance on United States manufacturers.

Part of this is due to political considerations and partly because the Russian-Ukrainian conflict has revealed the importance of enhancing defense logistics within Europe.

“The United States will always be a supplier of equipment and weapons systems to Europe,” Mr. Thays said. “It’s not something that’s going away, but in five, 10, 15 years, the overall percentage of American commitment in European militaries will inevitably be smaller.”

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