Spain rejects NATO’s anticipated 5% defense spending proposal as 'unreasonable'

Key Points

• Spain rejects NATO’s proposed 5% GDP defense spending target, with PM Sánchez calling it “unreasonable” and warning it would divert resources from Spain’s optimal defense strategy.
• Spain was the lowest spender in NATO last year at under 2% of GDP and plans to raise defense outlays by €10.5 billion in 2025 to meet the 2% NATO benchmark.
• In his letter to NATO Secretary-General Rutte, Sánchez argues for a more flexible formula or optional application of any new target to avoid cutting public services and hindering Spain’s green transition.
• Most NATO allies, including Poland and the Baltic states, are on track to endorse a 5% target, while the alliance debates a new tiered spending plan aiming for 3.5% on core defense and an additional 1.5% on logistics.

MADRID (AP) — Spain has rejected a NATO proposal to spend 5% of gross domestic product on defense needs that’s due to be announced next week, calling it “unreasonable.”

Prime Minister Pedro Sánchez, in a letter sent on Thursday to NATO Secretary-General Mark Rutte, said that Spain “cannot commit to a specific spending target in terms of GDP” at next week’s NATO summit in The Hague, Netherlands.

Any agreement to adopt a new spending guideline must be made with the consensus of all 32 NATO member states. So Sánchez's decision risks derailing next week's summit, which U.S. President Donald Trump is due to attend, and creating a last-minute shakeup that could have lingering repercussions.

Most U.S. allies in NATO are on track to endorse Trump’s demand that they invest 5% of GDP on their defense and military needs. In early June, Sweden and the Netherlands said that they aim to meet the new target.

A NATO official on Thursday said that discussions between allies were ongoing about a new defense spending plan.

“For Spain, committing to a 5% target would not only be unreasonable, but also counterproductive, as it would move Spain away from optimal spending and it would hinder the EU’s ongoing efforts to strengthen its security and defense ecosystem,” Sánchez wrote in the letter seen by The Associated Press.

Spain was the lowest spender in the trans-Atlantic alliance last year, directing less than 2% of its GDP on defense expenditure.

Sánchez said in April that the government would raise defense spending by 10.5 billion euros ($12 billion) in 2025 to reach NATO’s previous target of 2% of GDP.

On Thursday, Sánchez called for “a more flexible formula” in relation to a new spending target — one that either made it optional or left Spain out of its application.

Sánchez wrote that the country is “fully committed to NATO," but that meeting a 5% target “would be incompatible with our welfare state and our world vision." He said that doing so would require cutting public services and scaling back other spending, including toward the green transition.

Instead, Spain will need to spend 2.1% of GDP to meet the Spanish military’s estimated defense needs, Sánchez said.

At home, corruption scandals that have ensnared Sánchez's inner circle and family members have put the Spanish leader under increasing pressure to call an early election, even from some allies.

Increased military spending is also unpopular among some of Sanchez's coalition partners. In April, when Sánchez announced that Spain would reach NATO's previous 2% spending target, the move angered some coalition members further to the left of his Socialist Party.

NATO allies agreed to spend 2% of GDP on military expenditure after Russia launched its full-scale invasion of Ukraine on Feb. 24, 2022. But the alliance's plans for defending Europe and North America against a Russian attack require investments of at least 3%.

The aim now is to raise the bar to 3.5% for core defense spending on tanks, warplanes, air defense, missiles and hiring extra troops. A further 1.5% would be spent on things like roads, bridges, ports and airfields so armies can deploy more quickly, as well as preparing societies for possible attack.

Several allies have committed to reaching the new spending goal, even though other nations will struggle to find the billions required.

Rutte had been due to table a new proposal on Friday aimed at satisfying Spain and trying to break the deadlock. European allies and Canada want to end the standoff before the leaders meet with Trump on Wednesday.

Poland and the Baltic countries — Estonia, Latvia and Lithuania — have already publicly committed to 5%, and Rutte has said that most allies were ready to endorse the goal.

But Spain isn't alone among NATO's low spenders. Belgium, Canada and Italy will also struggle to hike security spending by billions of dollars.

A big question still to be answered is what time frame countries will be given to reach an agreed-upon new spending goal.

A target date of 2032 was initially floated, but Rutte has said that Russia could be ready to launch an attack on NATO territory by 2030.