Back to future: NATO leaders hark back to Cold War as they meet to hike defence spending

The Hague (Netherlands) | NATO Secretary-General Mark Rutte was upbeat that the military organisation will agree on massive spending hikes at a “transformational summit” on Wednesday, as member state leaders including US President Donald Trump assembled in the Netherlands.

Leaders of the 32-nation alliance are expected to agree a new defence spending target of 5 per cent of gross domestic product, as the United States — NATO's biggest-spending member — shifts its attention away from Europe to focus on security priorities elsewhere.

“So a transformational summit. Looking forward to it,” Rutte told reporters in The Hague, before chairing the meeting's only working session, which was expected to last less than three hours.

But ahead of the meeting, Spain announced that it would not be able to reach the target by the new 2035 deadline, calling it “unreasonable.” Belgium signalled that it would not get there either, and Slovakia said it reserves the right to decide its own defense spending.

Many European countries face major economic challenges, and Trump's global tariff war could make it even harder for America's allies to reach their targets. Some countries are already squeezing welfare and foreign aid spending to channel extra funds into their military budgets.

On Tuesday, Trump complained that “there's a problem with Spain. Spain is not agreeing, which is very unfair to the rest of them, frankly.” He has also criticised Canada “a low payer”.

In 2018, a NATO summit during Trump's first term unravelled due to a dispute over defence spending.

But Rutte conceded that “these are difficult decisions. Let's be honest. I mean, politicians have to make choices in scarcity. And this is not easy.” But he said: “given the threat from the Russians, given the international security situation, there is no alternative.”

Russia's neighbours lead the pack in boosting spending Other countries closer to the borders of Russia and Ukraine — Poland, the three Baltic states and Nordic countries — have committed to the goal, as have NATO's European heavyweights Britain, France, Germany and the Netherlands.

“This is a big win, I think, for both President Trump and I think it's also a big win for Europe,” Finnish President Alexander Stubb told reporters. “We're witnessing the birth of a new NATO, which means a more balanced NATO.” He said it would take nations “back to the defence expenditure levels of the Cold War”.

NATO countries started to cut their military budgets in safer times after the Berlin Wall collapsed in 1989.

In a fresh take on Trump's MAGA movement, Lithuanian President Gitanas Nauseda said: “We should choose a motto, make NATO great again.” After Russia's full-scale invasion of Ukraine in 2022, the NATO allies agreed to make 2 per cent of GDP the minimum spending level. Last year, 22 countries were expected to hit that target, up from just three a decade ago.

In The Hague, the allies plan a major revamp of their spending targets. They are expected to up the ante for what NATO calls “core defence spending” to 3.5 per cent, while changing how it's counted to include providing military support to Ukraine.

To hit Trump's 5 per cent demand, the deal will set a second target of 1.5 per cent of GDP for a broader range of defense-related spending, such as improving roads, bridges, ports and airfields so that armies can deploy more quickly, countering cyber and hybrid attack measures, or preparing societies to deal with future conflicts.

Progress will be reviewed in 2029, after the next US presidential elections.

“This declaration is historic. We are 32 allies supporting that ambition, which is huge,” said Norwegian Prime Minister Jonas Gahr Støre. “We have been struggling to get above 2 per cent and now we said 3.5 per cent, which is necessary in order to reach our capabilities”.

Earlier this month, NATO agreed individual purchasing targets for nations to stock up on weapons and military equipment to better defend Europe, the Arctic and the North Atlantic, as part of the US push to ramp up security spending.

US decision on forces in Europe expected in coming months Extra funds will also be needed should the Trump administration announce a draw-down of forces in Europe, where around 84,000 US troops are based, leaving European allies to plug any security gaps. The Pentagon is expected to announce its intentions in coming months.

Beyond Trump's demands, European allies and Canada have steeply ramped up defense spending out of concern about the threated posed by Russia. Several countries are concerned that Russia could carry out an attack on NATO territory by the end of the decade. Hungary is not one of them, though.

“I think Russia is not strong enough to represent a real threat to us. We are far stronger,” said Hungarian Prime Minister Viktor Orban, fielding questions from reporters, leaning back with his hands thrust into his pockets. Orban is considered Russian President Vladimir Putin's closest ally in Europe.