Beyond Europe’s 5% defence spending: the numbers tell a very different story

Europe’s NATO allies just made history.

At the latest summit in The Hague, all 32 member states endorsed a bold new target: spend 5% of GDP on defence to prepare for a world where Russia is strengthening, while the US threatens to walk away. 

It was meant to show strength, but the numbers suggest something different. Behind the unity lies a chaotic, improvised, and in some cases entirely fictional military build-up.

The headline number is misleading

The 5% NATO target sounds simple, but it isn’t. The number is split: 3.5% of GDP must go to traditional defence like tanks, jets, salaries, logistics.

The remaining 1.5% can cover broader “security” investments like cybersecurity, telecommunications, disaster response, and even infrastructure. 

That distinction matters because for the past decade, many countries barely hit the original 2% goal using exactly those broader categories.

Take Spain. Prime Minister Pedro Sánchez recently unveiled a €10.5 billion spending plan. But just 19% of it goes to actual military hardware. The rest covers cybersecurity and emergency services. 

What Spain essentially did, is to negotiate a back door: it will spend 2.1%, not 5%. 

Italy is facing a debt-to-GDP ratio over 130% and therefore, it hasn’t presented any updated defence budget but insists it has reached the 2% mark by including coast guard operations and financial-crime policing.

What’s really happening is reclassification. Under NATO’s new rules, many of the old 2% tricks no longer count as defence. 

In fact, some countries’ real military spending may now register closer to 1.3% once the accounting fog clears.

Europe isn’t ready to absorb this money

The problem isn’t just inflation, it’s execution. The German example is revealing. 

Chancellor Friedrich Merz has promised to build Europe’s most powerful conventional military. He even succeeded in suspending Germany’s debt brake to unlock spending. 

But in 2023, Germany left €76 billion of its federal budget unspent, including large portions allocated to defence and infrastructure.

Of its €100 billion military fund, only 25% has been deployed in the past three years. And this isn’t new. 

Germany’s Climate and Transformation Fund that was meant to drive green energy and EV infrastructure, has averaged just 65% execution over the past seven years.

Source: Bloomberg

Now imagine trying to triple military spending across Europe by 2030. Where will the procurement staff come from? The engineers? The materials? The workers? 

Germany’s own construction sector is at full capacity. Throwing more money at the system doesn’t create readiness. It will only create bottlenecks.

The wrong military is being built

If NATO’s target were a transformation plan, it would prioritize the lessons of Ukraine: drones, cheap autonomous systems, electronic warfare, logistics intelligence, and rapid-response networks. 

Instead, most countries are defaulting to what they know, such as legacy systems and domestic suppliers.

In Germany, Rheinmetall and Hensoldt continue to dominate procurement. In France and Italy, naval contracts and aerospace partnerships absorb much of the new cash. 

Some countries have even inserted irrelevant projects like maritime surface capabilities into EU loan applications, simply because they know how to spend on ships.

What Europe needs is a defence revolution. What it’s getting is a surge in conventional spending locked in 20th-century thinking. 

The biggest issue is that the spending plan isn’t being built for a modern war. It’s being built for political optics and procurement convenience.

Public opinion is fragmented and full of contradictions

European citizens support rearmament, until it affects them directly. Polling by the ECFR shows strong support for higher military budgets in Poland (70%), Denmark (70%), and the UK (57%).

But in Germany, Spain, and France, support hovers at 45%. In Italy, it plummets to 17%.

On conscription, the generational gap is striking. In France and Germany, older voters back the return of military service. Among 18- to 29-year-olds, which are the ones who’d actually serve, opposition is dominant.

There’s political will in some parliaments, but not on the streets.

Source: The Guardian

Meanwhile, trust in the US is fading. In Germany and the UK, over two-thirds of citizens now believe the American political system is broken. 

In Denmark, that number jumps to 86%. What used to be unshakable transatlantic faith is eroding, especially under Trump.

And yet, European far-right parties now openly admire Trump’s leadership style. They no longer look to Putin for cues, but to Florida instead.

In a twist of Cold War irony, being pro-American today often means being anti-European.

Strategic autonomy is the story everyone’s avoiding

This might be a tough pill to swallow, but, Europe still can’t defend itself without the US, no matter how much it spends.

Most European militaries lack the ability to coordinate large, multi-national combat operations. NATO’s integrated command structure is still American-led. 

Europe depends on the US for surveillance, satellite data, missile defence, and long-range logistics. Even with a surge in budgets, that dependency isn’t going away.

Some countries, like Poland and Spain, now favor building a separate European nuclear deterrent. 

In Germany, Chancellor Merz proposed sharing France and the UK’s nukes, but admits this couldn’t replace the US umbrella.

Ultimately, the 5% pledge was meant to prove that Europe is serious about defence. But serious defence doesn’t come from pledges. It comes from clarity, execution, and realism. 

Right now, Europe is spending more, but not smarter. It’s building weapons without reforming command structures.

It’s investing in old defence models while the battlefield is evolving. And it’s still waiting for the US to show up.

Perhaps what NATO needs isn’t more money. It needs to define a real plan that does not depend on the US anymore.

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