UK Prime Minister Keir Starmer was perhaps the keenest at Nato’s 2025 Summit, held on 24-25 June in the Hague, to emphasise his government’s commitment to the new Nato spending target of 5% of GDP – 3.5% of this spent on ‘pure’ defence matters as previously defined in Nato guidelines, such as procurement, operations and military R&D, with the other 1.5% going towards ‘resilience’ – cybersecurity, infrastructure, direct investment in industry, and other such measures. The alliance has set the goal of member states reaching 5% within a decade. Spain was a notable dissenter, claiming it can meet Nato’s capability targets at just 2.1% of GDP. However, Europe’s other defence ‘big hitters’ – Germany, Poland and France – were vocally supportive of the goal. Moreover, aid to Ukraine will be calculated as part of the target.
It is also pertinent to ask: is a focus on an abstract percentage really meaningful in practical terms for Nato? Obviously, a higher budget in principle translates to a stronger, larger military. However, ‘creative’ accounting is almost certain to be used. Italy is planning on counting the €13.5bn cost of a new bridge between Sicily and the mainland as part of the 5%. It’s not immediately clear how precisely Rome intends to spin this, but they likely won’t be alone either. Defence budgets are often distorted and diluted by including spending items not traditionally counted as ‘defence’, both in and out of Nato. There are myriad factors that can influence value-for-money: PPP disparities, economies of scale, procurement inefficiency, and much more. Of course, it is impossible to predict the final outcome of the summit in the long term yet, but readers may be just as likely to be shocked at quite how little the money uplift has bought Europe in a few years as they are to be satisfied. Ultimately, there is no guaranteed link between spending more and necessarily producing, procuring and operating effectively.
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Instead, European countries should think more in terms of tangible capability requirements, which are specified by Nato on both a national and multinational level, as well as going further in the continent’s work to coordinate and streamline arms production. There should also be a strong focus on buying European, to minimise reliance on the US for crucial enabling elements such as ballistic missile defence, air-to-air refuelling, and other logistical or C4ISR functions. On some level, it is understandable that leaders don’t articulate this goal publicly to avoid drawing the ire of Trump, who reliably seeks a transactional approach in foreign relations. But in the longer term, it is crucial to avoid the kind of scenario that has led to this tense period in the first place – the strained relationship with the US and the threat of a resurgent Russia.
A less-reported event during the summit was another meeting between President Trump and Volodymyr Zelenskyy. Ukraine was overall somewhat sidelined this year, but Trump remarked the country was ‘fighting a brave battle’, a marked change in tone since the infamous Oval Office argument. However, Trump was also evasive when pressed on the future of Patriot missile supplies, and since the summit, two crucial things have happened. Firstly, sanctions on Russian banks that prevented them from investing in foreign energy projects were quietly lifted by the US. When sanctions were recently lifted on Syria, several Russian financial entities were also discreetly relieved, including Rosboronexport, the state agency for arms exports. Secondly, the Pentagon has announced a hold on several weapons shipments to Ukraine, affecting a whole spectrum of capabilities – air defence systems, artillery, maintenance services and even small arms. Other banking sanctions were simultaneously renewed, but the Trump administration continues to signal both its disinterest in Ukrainian integration with the ‘west’ and its impatience with attempted negotiations to end the war.
Conversely, Europe remains both highly committed to supporting Ukraine and concerned with the very real possibility that it may come into direct conflict with Russia over the Kremlin’s territorial ambitions. It has, since February 2022, almost continually worked towards greater strategic autonomy for the continent and boosting its own production capacity. At the same time, it continues to buy US weapons, relies on US capabilities, and seems diplomatically fixated on trying to encourage Trump into an affinity for Ukraine’s plight rather than employ leverage to convince the US of the need to support Ukraine. Many have suggested conditioning further purchases of US arms on the ability to pass these into Ukrainian hands, on pain of much reduced business for US industry. A series of polls done by the Institute for Global Affairs shows stark discontent in the transatlantic alliance. Well over half of Europeans said they felt the US was somewhat or very unreliable for guaranteeing European security, a figure that has doubled since a poll last year. Nearly 50% polled in France and Germany said they were not confident the US would intervene were either directly attacked. Meanwhile, over half of Americans say their government should divert resources and attention away from Nato to domestic matters.
This is producing a notable dissonance in Nato. Trump’s boisterous and erratic approach to foreign policy is making contradictory directions of travel: respect the USA and pay homage to its leadership, but rely on yourselves more for defence. Be less dependent militarily on America, but make sure you keep buying our weapons. European leaders keep emphasising strategic autonomy, but are desperate to ensure the success of the ‘too big to fail’ F-35 programme – directed chiefly from the USA – and continue to import from the US at astonishing rates: arms shipments to Europe from the US increased by 233% during 2020-2024. Hanging over all this still is Trump’s repeated overtures to US ownership of Greenland, which is Danish sovereign land. By agreeing to the 5% target, Europe may have simply produced new conundrums: Trump is just as likely to use increased European spending on paper as an excuse to further withdraw from the continent, or, having secured one major concession, may push for others such as a mandated percentage spend on US-only equipment. As already mentioned, Europe needs a laser focus on the ultimate outputs of defence spending. And it must make serious, long-term decisions on whether it truly wants such a close military relationship with the US that is increasingly polarised domestically, and both challenged and distracted on the wider world stage.
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By GlobalDataThough this briefing has been largely critical of the discourse in Nato and Europe, it is necessary to note that there are many optimistic signals for Europe’s strategic autonomy. The EU Space Act ties into the bloc’s 2022 defence and space strategy to increase the competitiveness and efficiency of Europe’s space industry. This is a crucial step in reducing the European reliance on US strategic enablers such as space-based intelligence, surveillance and reconnaissance assets, and area where some states have already taken matters into their own hands, with Finland developing a sovereign SAR satellite capability with Iceye, and Sweden signing a letter of intent for deepened cooperation with Ukraine on space capabilities. SAMP/T, the closest European equivalent to Patriot missile defence, is increasing production on both launchers and missiles – France is aiming to reduce the 40-month production time for Aster missiles down to 18 months by 2026. Rheinmetall is on a credible path to manufacturing 1.1 million artillery shells a year by 2027. From Airbus’s heavy lift transports to Saab’s experience in counter-battery radar and AWACS [airborne warning and control systems], there is a real technical ability in Europe to build a truly independent military system – but it will require bolder leadership, a more honest and coordinated approach to spending, and practical action in the defence industry.
