• European NATO allies and Canada are spending an estimated average of 2.53% of GDP on core defence in 2025, surpassing the 2% target.
  • NATO Secretary General Mark Rutte urges members to maintain momentum as the alliance shifts toward a more structured spending framework.
  • The increase reflects sustained post-2022 defence efforts, but questions remain about long-term budget sustainability.

Spending Surpasses Target

NATO Secretary General Mark Rutte confirmed on Thursday that European members and Canada are projected to spend an average of 2.53% of GDP on core defence this year, according to a senior NATO official. The figure marks a significant leap from the 2% target set in 2014 and underscores the alliance's intensified focus on deterrence since Russia's full-scale invasion of Ukraine.

"This is a clear demonstration of our collective resolve," Rutte said at a press conference in Brussels. "But we cannot afford to slow down." He emphasized that the spending must translate into tangible capabilities, including ammunition stockpiles and logistics.

A New Benchmark

The alliance is moving beyond the 2% threshold, with officials now emphasizing a "core defence" category that covers troops and armaments, excluding broader security investments like cyber. The shift reflects NATO's evolving threat assessment and the need for more precise spending metrics.

"The 2% was always a floor, not a ceiling," said a NATO official familiar with the discussions. "Now we're asking allies to show they're on a credible path to even higher benchmarks."

Political and Economic Implications

The spending surge has sparked debate in several capitals. Critics argue that defence budgets are straining public finances, while supporters point to the security dividends. In Germany, which is on track to meet 2% this year, coalition tensions have emerged over how to fund long-term commitments.

"The challenge is sustaining this pace," said a European diplomat. "If economic growth slows, political will may fray."

Industry Impact

Defence contractors are already seeing increased demand. Lockheed Martin and Rheinmetall have reported rising orders for air defence systems and artillery. However, supply chain bottlenecks remain a concern.

Rutte noted that the alliance is working with industry to accelerate production. "We need to convert spending into readiness, not just spreadsheets."

Looking Ahead

NATO will release detailed country-by-country figures next month. The report is expected to show Poland leading at over 4% of GDP, while several smaller allies still lag behind. Rutte called on all members to meet or exceed 2% by 2026.

"The security environment won't wait for budgets," he said.

This article was updated to clarify that the 2.53% figure applies to core defence spending, as defined by NATO.