NATO is moving towards 5% of GDP for defense. This is a strategic turning point that is redefining budgets, the military industry, and the balance of power in Europe.
Summary
On December 11, 2025, during a summit in The Hague followed by a visit to Germany, NATO Secretary General Mark Rutte confirmed a major shift: the Allies are converging on a defense effort equivalent to 5% of GDP, with 3.5% dedicated to basic military capabilities. This milestone marks a historic break with the 2% target set after 2014. Germany has already announced that it will reach this 3.5% target by 2029, accelerating its purchases of fighter jets, drones, and ammunition. Behind the announcement, a structural shift is taking shape: defense is no longer a budgetary adjustment, but a lasting pillar of economic and industrial policy. This trajectory raises serious issues: financial sustainability, European coordination, industrial dependence, and strategic credibility vis-à-vis Russia and China.
An unprecedented change in budgetary doctrine
Since the end of the Cold War, NATO countries’ military spending has followed a downward trajectory, punctuated by temporary corrections. The 2% of GDP target set at the Wales summit in 2014 was already a break with the past at the time. The announced shift to 5% of GDP is a step up in scale.
This new benchmark reflects a more realistic assessment of the strategic environment. The Allies now consider that conventional deterrence, territorial defense, and preparation for high-intensity conflict require a structural, long-term effort. It is no longer a question of catching up, but of reaching a cruising level.
In reality, few countries were already spending 3% of their GDP on military expenditure. Setting a target of 5% redefines the hierarchy of national budgetary priorities.
The key distinction between basic expenditure and expanded effort
Mark Rutte’s announcement introduces an essential nuance. Of the 5%, 3.5% relates to basic military needs: armed forces, equipment, ammunition, training, infrastructure, and maintenance. The remainder corresponds to expanded security-related spending: cyber defense, critical infrastructure protection, industrial or logistical support.
This distinction aims to avoid a known pitfall. In the past, some countries have artificially inflated their figures by including peripheral items. By setting a clear threshold for core military spending, NATO seeks to ensure a real increase in capabilities.
For military leaders, this is a clear signal: money must produce combat-ready units, not just accounting lines.
Germany as a catalyst for change
Germany’s announcement that it will reach 3.5% of GDP by 2029 has strong symbolic significance. For decades, Berlin has been criticized for underinvesting in its military, despite its economic weight. The shift that began in 2022 is continuing and accelerating.
At this level of spending, Germany will devote more than €140 billion to its defense each year, according to current GDP estimates. This changes the scale of the Bundeswehr, but also that of the European arms market.
The stated priorities are clear: combat aviation, drones, air defense, artillery, and ammunition stocks. Orders for fighter jets, whether for existing platforms or future programs, are being accelerated. Drones, which have become central since the war in Ukraine, are playing an increasingly important role in decision-making.
Combat aviation at the heart of the build-up
Aviation is one of the main beneficiaries of this budgetary trajectory. Recent conflicts have shown that air superiority cannot be decreed. It is built through large, well-trained fleets supported by robust logistics chains.
With 3.5% of GDP dedicated to basic capabilities, NATO countries can renew their aging fleets, increase availability rates, and finance expensive ammunition. A modern air-to-air missile or precision munition often costs several hundred thousand euros. On a large scale, these costs quickly become limiting without an adequate budget.
Germany’s rise in power automatically draws its partners along with it. It creates a critical mass that drives standardization, but also industrial competition.
Drones as a symbol of a new balance
The decision to invest heavily in drones is revealing. Their cost-effectiveness has become central. A reconnaissance or attack drone can be mass-produced, quickly adapted, and replaced without the political and human impact associated with the loss of a pilot.
Expanded defense budgets allow drones to be integrated at all levels: tactical, operational, and strategic. This includes combat drones, persistent surveillance drones, and logistical support drones.
For NATO, the challenge is twofold. On the one hand, it must not allow adversaries capable of mass production to gain a structural advantage. On the other hand, it must integrate these systems into coherent doctrines without weakening manned forces.
A profound reorganization of defense industries
An effort representing 5% of GDP cannot be absorbed without industrial transformation. European production lines, often designed for limited series, must change scale. This applies to aircraft, but also to ammunition, sensors, and command systems.
Germany, France, Italy, and Spain see this trajectory as an opportunity to revive a more autonomous industrial base. However, competition with American manufacturers remains strong, particularly in combat aviation and drone systems.
The issue is no longer solely military. It is becoming economic. Defense spending influences employment, research, and the trade balance.
Tensions between sovereignty and interoperability
The massive increase in budgets is reviving an old debate: whether to buy national, European, or American. In the short term, speed often favors existing solutions, sometimes outside Europe. In the long term, sovereignty pushes for investment in joint programs.
The risk is well known. Without coordination, the 5% of GDP could result in increased fragmentation, with heterogeneous fleets and high support costs. NATO therefore insists on interoperability, but this does not solve everything.
Germany’s trajectory will have a knock-on effect, but also create tension. Partners expect this effort to benefit the European ecosystem, not just external suppliers.
A strategic signal to Moscow and Beijing
Beyond the figures, the announcement has a clear political dimension. It aims to restore credibility of deterrence in the face of Russia, which is engaged in a war economy, and China, whose military budgets are steadily increasing.
A commitment of 5% of GDP means that NATO is preparing for a sustained conflict environment. This signal reduces the hope of a rapid exhaustion of Western democracies. It indicates that the cost of a prolonged confrontation would be high for any adversary.
This stance does not exclude dialogue, but it sets the conditions for it. Negotiations are conducted from a position of strength, not budgetary constraints.
The limits and risks of such a commitment
An effort of this magnitude is not without risks. Not all countries have the same economic capacity. For some Allies, reaching 5% of GDP involves sensitive social and political trade-offs.
There is also a risk of industrial overheating. Injecting massive amounts of credit without planning can lead to bottlenecks, price increases, and delays. Recent experience with ammunition has shown this to be the case.
Finally, money is no substitute for the human factor. Training pilots, mechanics, or drone operators takes time. Budgets can accelerate, but they cannot indefinitely compress training cycles.
A new strategic normal for NATO
The agreement on 5% of GDP marks a lasting change. This is not a temporary peak, but a new normal. Defense is becoming a structural investment, comparable to infrastructure or energy.
For military aviation and drones, this trajectory opens up a long cycle of modernization and rearmament. It also requires collective discipline. Spending more only makes sense if the money produces credible and coordinated capabilities.
This turning point does not guarantee absolute security. However, it does reduce a key vulnerability: the illusion that lasting peace can be ensured at low cost. NATO now recognizes the opposite.
Sources
- NATO — official statements by Secretary General Mark Rutte, December 2025
- Bundesministerium der Verteidigung — budget announcements and planning for 2029
- International Institute for Strategic Studies — The Military Balance
- German parliamentary reports on the Bundeswehr
- Economic analyses of NATO countries’ defense efforts
War Wings Daily is an independant magazine.