All 32 NATO Members Hit the 2% Defense Target for the First Time Ever in 2025

For the first time ever, all 32 NATO members hit the 2% target simultaneously

NATO's 2% of GDP defense spending guideline was first agreed in 2006 and formalized as a pledge at the 2014 Wales Summit, in response to Russia's annexation of Crimea. For over a decade, most members fell short: as recently as 2017, only four countries met it. In 2025, that changed completely: for the first time in the target's history, all 32 NATO member states met or exceeded the 2% threshold, a milestone NATO Secretary General Mark Rutte formally confirmed in the alliance's Annual Report on March 26, 2026.

European allies and Canada collectively increased defense spending by nearly 20% in real terms in 2025 compared to 2024, reaching a combined $574 billion (in constant 2021 prices). Combined with the United States' own $838 billion contribution, total NATO allied defense spending exceeded $1.4 trillion for the year, according to NATO's own official figures.

A new, much more ambitious target is already being phased in

At the 2025 NATO Summit in The Hague, member states went further, committing to a new target of 5% of GDP on defense-related spending by 2035, an agreement known as The Hague Investment Pledge. This target is explicitly divided into two components: 3.5% of GDP on core military defense spending, and a separate 1.5% on broader defense-related investment, which can include things like infrastructure and industrial base development, categories that already substantially overlap with what many countries already count as core defense spending.

The scale required to hit this new target is genuinely enormous: SIPRI calculates that reaching just the 3.5% core defense component across all NATO members by 2035 would require roughly $1.4 trillion more in annual spending than 2024 levels, pushing total alliance spending to about $2.9 trillion; reaching the full 5% figure would require nearly $2.7 trillion more, for a total of roughly $4.2 trillion annually by 2035.

Not every country signed on equally, and the specific gaps are politically significant

• Spain formally secured an exemption from the 5% pledge specifically, with Prime Minister Pedro Sánchez publicly calling the target "unreasonable and counterproductive" and arguing rapid escalation to that level would harm national economic growth, making Spain, a NATO member with full Article 5 protection, the only ally that didn't sign the full commitment
• As of 2024, Poland had the highest military burden among all NATO members at 4.2% of GDP, already close to the new 3.5% core-defense component of the 2035 target, well ahead of most other allies
• Luxembourg averaged under 0.6% of GDP on defense between 2014 and 2024, the lowest of any member, and even its recent increase to roughly 2% represents a structural reversal that analysts note will need to be sustained over multiple years to be considered credible
• For the first time in NATO's recorded history, Norway surpassed the United States in defense spending measured per capita in 2025, according to Atlantic Council tracking, a genuinely notable individual milestone in the broader burden-sharing conversation

A parallel EU initiative adds another layer to the burden-sharing picture

Separate from NATO's own targets, the European Union's "ReArm Europe" / "Readiness 2030" plan, announced March 4, 2025 by European Commission President Ursula von der Leyen, aims to leverage €800 billion in defense-related spending by 2029 through EU-specific financial mechanisms (loans, budget flexibility, and redirected cohesion funds), operating alongside, not instead of, individual countries' NATO spending commitments. This adds a genuinely separate institutional framework to the overall European defense buildup, distinct from the direct U.S.-to-ally pressure dynamics that have driven much of the NATO-specific spending conversation.

The core disagreement

Supporters of the accelerated spending targets generally argue that the rapid, unprecedented pace of the 2025 increase (all 32 members hitting 2% simultaneously for the first time) reflects genuine, well-founded European concern following Russia's invasion of Ukraine, and that a more genuinely shared defense burden reduces disproportionate reliance on U.S. military spending and presence. Skeptics, including Spain's own explicit objection, generally argue the 5% target represents an unrealistic, potentially economically harmful pace of increase for many national budgets, with SIPRI's own analysis noting that for many countries hitting even the 3.5% core component would mean doubling or tripling current defense expenditure. Both sides broadly agree the shift documented in 2025, from a decade of persistent underspending relative to the 2% guideline to universal compliance in a single year, represents a genuine, structural change in how European governments now approach defense investment, not simply rhetorical commitment.