NATO Summit Plans on Establishing Goal of Spending Minimum of 2% of GDP on Defense

On July 7, 2023, NATO Secretary General Jens Stoltenberg announced that NATO leaders have plans of setting a goal of spending at least 2% of their countries’ gross domestic product (GDP_ on defense. 

“At the Summit, Allies will set a more ambitious defense investment pledge, to invest a minimum of 2% of Gross Domestic Product annually on defense,” he stated.

Per Stoltenberg, NATO will crank up defense spending by 8.3% in 2023. “Today, we are releasing new defense spending estimates. In 2023, there will be a real increase of 8.3% across European Allies and Canada. This is the biggest increase in decades. And the ninth consecutive year of increases in our defense spending,” he stated. “So European Allies and Canada will have invested over 450 billion extra US dollars since we agreed our defense investment pledge in 2014.”

Back at a summit in Wales in 2014, NATO member states made a decision to establish a target of spending 2% of national GDP on defense. During a presentation conducted for an annual report on NATO activities, Stoltenberg stated in March 2024 that only seven out of 30 NATO member states had achieved the target. Per the report, the countries that spent over the 2% target were Greece (3.54%), the United States (3.46%). Lithuania (2.47%), Poland (2.42%), the United Kingdom (2.16%), Estonia (2.12%), and Latvia (2.07%). Germany spent 1.40% of its GDP on defense. Spain (1.09%) and Luxembourg (0.62%) were some of the lowest defense spenders in terms of GDP. 

While NATO countries should be doing more to spend on their own defense, the US needs to use this growing trend to justify its eventual exit from this entangling alliance. At the end of the day, national defense is an important function of rational governance. However, such spending should only be dedicated towards addressing real threats and security challenges. If it’s not, it’s merely a policy prescription for geopolitical trouble.

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