ANALYSIS: Five percent of GDP: The budget revolution Rutte wants to set in stone in Ankara

A Decade of Gradual Recovery

The collective financial commitment of NATO’s European and Canadian allies for the decade from 2016 to 2026 is staggering: an additional 1.2 trillion dollars invested in defense compared to a constant baseline. This figure, cited by Rutte before the Atlantic Council on June 25, 2026, includes all national defense budget increases since the 2014 Wales Declaration, which set the target of 2% of GDP.

This growth was accelerated by two successive shocks: the annexation of Crimea in 2014, which served as a first wake-up call, and the full-scale invasion of Ukraine in February 2022, which triggered a second, much stronger jolt. In 2025 alone, European and Canadian allies increased their defense spending by nearly 20%, representing an additional $139 billion compared to the previous year. This pace of acceleration is unprecedented in the Alliance’s recent history.

Comparison with the United States: Toward a Rebalancing

One of Trump’s strongest arguments against the imbalance in NATO—that the United States funds Europe’s defense while Europeans benefit from its security umbrella—is gradually losing its relevance. Rutte made it clear: European and Canadian allies “are on track to bring their defense spending in line with that of the United States.” This rebalancing is not yet complete, but its direction is clear. And Rutte explicitly attributed part of the credit for this transformation to Trump himself, whose persistent pressure ultimately produced results that polite diplomacy had failed to achieve.

With U.S. GDP at $30 trillion and the combined GDP of Ankara’s allies at $70 trillion, if Europeans and Canadians reach 5% of GDP, they would be spending far more than the United States in absolute terms. This rebalancing would structurally transform the transatlantic dependency that has fueled Trump’s criticism for years. This is a political prospect just as significant as the budget figures themselves.

The prospect of Europeans and Canadians spending more on defense than the United States in absolute terms—that is the scenario Trump demanded but never truly believed he could achieve. If Ankara delivers credible trajectories toward 5%, Trump could indeed find himself having “won” the NATO burden-sharing negotiations. It’s a delightful diplomatic irony. And for the Alliance, it’s a desirable outcome for reasons that go far beyond Trump’s politics.

Estonia, Latvia, Lithuania, Poland: The Pioneers

Four countries deserve special mention in the race toward 5% of GDP: Estonia, Latvia, Lithuania, and Poland. These four members on NATO’s eastern flank, which share borders with Russia or Belarus, have not only met but have far exceeded the 2% of GDP target for several years. They are now on a trajectory that is already bringing them close to 3–4% of GDP, and some of them plan to reach 5% well before 2035.

For these countries, investing in defense is not a difficult political decision—it is a geographical and historical given. Estonia, which shares a 293-km border with Russia, has a recent history of Soviet occupation that makes the abstract risks—which other countries struggle to visualize—all too real. Poland, whose soldiers from World War I and World War II gave their lives defending a disputed border, understands viscerally what it means to live next to an imperial neighbor. Their example should be followed more quickly by their Western European allies.

Romania, Bulgaria, Hungary: The Laggards on the Eastern Flank

Unlike their Polish and Baltic neighbors, Romania, Bulgaria, and Hungary have had more erratic defense spending trajectories. Romania is making an effort and purchasing equipment from South Korea, according to Rutte—a notable development. Orbán’s Hungary remains the most problematic case: a NATO member that maintains unusually close ties with Moscow, regularly slows down the Alliance’s decisions on sanctions and support for Ukraine, and whose commitment to the 5% of GDP target deserves close scrutiny in Ankara.

These disparities within the Alliance illustrate the structural difficulty of applying a collective goal to countries with very different geographic, historical, and political contexts. NATO has no sanctions mechanism against members who fail to meet their budgetary commitments—the pressure is purely diplomatic and political. This is a real limitation of the system, which makes Ankara’s decisions on transparency and accountability mechanisms all the more important.

Orbán’s Hungary in a NATO that is trying to unite against Putin: this is one of the Alliance’s most difficult tensions. I do not believe that expulsion is the right answer—it is not provided for in the treaty, and it would create more problems than it would solve. But transparency regarding each ally’s actual contributions, and collective diplomatic pressure on those lagging behind, are legitimate tools that the Ankara summit should use without hesitation.

The Industrial Barrier: Increasing Budgets Isn’t Enough If Industry Doesn’t Follow Through

One of the least publicized obstacles to reaching 5% of GDP is not political—it is industrial. Even if all allies decided tomorrow to massively increase their defense budgets, the defense industry could not absorb this additional spending immediately. There is a shortage of factories, production lines, skilled workers, and subcontracting capacity. According to Rutte, NATO’s order backlog already exceeds $300 billion—and “the U.S. defense industrial base is producing too slowly.”

That is why the “transatlantic defense industrial revolution” that Rutte is advocating in Ankara is just as important as budgetary commitments. It includes investments in new factories—such as Rheinmetall’s plant in Germany, which will produce 350,000 155mm shells per year, or the new factory in Bavaria for missile interceptors—transatlantic industrial partnerships, and a streamlining of supply chains to reduce production lead times.

Quadrupling 155mm shell production: an example of the necessary industrial transformation

General Stringer, NATO’s Deputy Commander, stated in the days leading up to the Ankara summit that the goal is to quadruple the production of 155mm shells—the standard caliber for allied artillery. This fourfold increase highlights the gap between available stockpiles and the actual needs of a high-intensity war like the one unfolding in Ukraine, where thousands of shells are used every day.

Quadrupling shell production cannot be achieved in a month. It requires building or adapting factories, securing supply chains for propellant and metals, training specialized workers, and managing storage and transportation logistics. This type of industrial transformation typically takes two to five years. Ankara’s commitments on this issue must therefore include not only final production targets but also intermediate milestones and immediate investments that kickstart the transformation right now.

The fourfold increase in 155mm shell production reminds me of Roosevelt’s 1941 statements about transforming the United States into an “arsenal of democracy.” NATO needs an industrial transformation of this magnitude. This is not a matter of political will—it is a matter of actual industrial capacity. And Ankara’s rhetoric will be worth nothing without the accompanying investments in factories.

Defense Industry Day: The First Day of the Summit

The first day of the Ankara summit will feature a major Defense Industry Day—a departure from previous formats. The idea is to bring together governments, defense industry representatives from both sides of the Atlantic, and Ukrainian officials to announce and sign concrete contracts. Rutte has promised announcements of “tens of billions of dollars in new defense contracts.”

These contracts will cover major weapons systems—fighter jets, tanks, missile systems—as well as emerging technologies: drones, artificial intelligence applied to defense, and cyber capabilities. Speaking before the Atlantic Council, Rutte mentioned both traditional defense giants—Lockheed Martin, RTX, Northrop Grumman, Boeing, and General Dynamics—and new technology companies such as Anduril, Palantir, and Divergent Technologies, whose innovations are changing the face of modern defense.

The “defense dividend”: Rutte’s economic argument

To convince even the most reluctant governments to increase their defense spending, Rutte uses an economic argument that goes beyond mere security: the “defense dividend.” The idea is that investment in defense creates jobs, stimulates technological innovation, and strengthens domestic industries—an argument that politicians can sell to their constituents who question the cost of NATO commitments. Rutte noted that European companies investing in the United States support more than 110,000 direct jobs in the U.S., and that Europeans spent $54 billion in the United States on industrial defense equipment in a single year.

This argument about the economic dividend is appealing but must be handled with caution. Defense spending is not economically neutral—it has a real opportunity cost: the billions spent on tanks and missiles are not spent on hospitals, schools, or climate action. In economies under fiscal pressure, this is a difficult choice. But if the alternative is a NATO war with Russia—whose economic cost would be incomparably higher—the calculation changes.

The argument about the economic dividend of defense is politically useful, but it must not become a pretext for avoiding the real debate. The real debate is this: what level of geopolitical risk is the West willing to assume in order to save on defense? The answer over the past four years is clear: not enough. And the price of this shortfall is being paid in Ukrainian lives. This is the moral argument I raise against all economic arguments against increasing defense spending.

Trump as an Unintended Catalyst for Strengthening European Defense

It would be paradoxical not to acknowledge Trump’s role in transforming allied defense spending. Rutte said it explicitly: “I am convinced that we would not have made such a leap without President Trump’s leadership.” This skillful phrasing gives Trump political credit for a transformation that his pressure helped trigger—even if the motivations behind this transformation run much deeper than a simple desire to appease Washington.

The reality is that Trump acted as an electric shock to European defense. His threats to withdraw, his criticism of allies who do not pay “their share,” and the uncertainty created by his unpredictability convinced European governments that would otherwise have continued to postpone difficult decisions on defense budgets. The fear of being left without NATO is more effective at increasing spending than love for NATO.

NATO 3.0 and the Distribution of Command

Rutte’s NATO 3.0 doctrine—“a stronger Europe in a stronger NATO”—entails a redistribution of command responsibilities. Over the next 12 to 18 months, according to available information, Europe is expected to take over certain land, air, and maritime commands currently led by U.S. officers. This is not a U.S. withdrawal—the United States maintains its presence and nuclear deterrent—but a more balanced distribution of operational responsibilities.

This transition is both necessary and risky. Necessary because Europe must be capable of coordinating its own defense if the United States is engaged in another theater—the Indo-Pacific, in particular. Risky because a poorly managed transfer of command can create ambiguities in the chains of command, gaps in operational coordination, and send the wrong signals to an adversary constantly looking for weaknesses. The NATO Force Model—the planning tool that structures this transfer—is crucial for ensuring a smooth transition.

I support, in principle, the transfer of NATO command structures to Europe. Not because I want the United States to disengage—I do not—but because an Alliance in which Europe is unable to defend itself without Washington’s permission is structurally unstable. Dependence breeds fragility. And in a world where Trump can change his position via Truth Social, fragility is a luxury Europe cannot afford.

Drones, Anti-Drone Systems, and Artificial Intelligence

The lessons from the war in Ukraine must guide the priorities for allocating 5% of GDP. One of the most important lessons: drones have become the defining weapon of modern combat. From Ukrainian drones setting Russian refineries ablaze from 1,300 km away to kamikaze drones neutralizing enemy tanks on the front lines, this technology has revolutionized warfare. And counter-drone systems—designed to destroy enemy drones—have become just as critical.

Rutte explicitly mentioned artificial intelligence as a priority for Ankara’s investments. AI applied to defense—intelligence analysis systems, real-time processing of sensor data, and the automation of certain tactical decisions—represents the competitive advantage of the coming decades. Allies who invest early in these capabilities will have a decisive advantage over those who lag behind. And Ukraine, which has had four years to develop these applications under real combat conditions, is perhaps the best teacher available.

Anti-drone defense as a top priority

Ironically, the 5% of GDP must fund not only offensive weapons but also defensive capabilities against the very weapons that Ukraine has made famous. Anti-drone defense systems—low-altitude radars, short-range interceptors, laser systems, and electronic jammers—have become a top priority for any military seeking to operate safely on a modern battlefield. Russia’s vulnerability to Ukrainian drones shows that even forces with advanced air defense capabilities can be overwhelmed by swarms of innovative drones.

For NATO armies, many of which have air defense systems designed for missiles and aircraft but not for drones, this represents an urgent need for investment. Ankara’s 5% of GDP must explicitly prioritize these capabilities—not just large conventional weapons systems designed for the wars of the past.

I am struck by the following paradox: the same Ukrainian drones that demonstrate the effectiveness of long-range offensive capabilities also demonstrate the vulnerability of traditional air defense systems. Ukraine is simultaneously teaching us how to strike with drones and how to defend against them. Both of these lessons must be incorporated into NATO’s investment priorities. And they are underrepresented in public discussions about the 5% of GDP.

NATO Membership: The Elephant in the Room in Ankara

Since the start of the war, Ukraine has aspired to join NATO. This aspiration was formally recognized in Bucharest in 2008 with the vague promise that “Ukraine will become a member of NATO.” Since then, this promise has remained up in the air—too risky to fulfill, according to some allies; vital to Ukraine’s security, according to Kyiv. The issue will be on the table in Ankara—indirectly, if not directly.

The argument for a formal invitation: denying Ukraine NATO membership amounts to denying it the only credible long-term security guarantee. Without the guarantee of Article 5, Ukraine will remain in a permanent gray zone—too vulnerable to be truly secure, yet not sufficiently part of the Alliance to be protected. This vulnerability is a constant invitation to future Russian aggression, whether a ceasefire is signed or not.

Prerequisites and Political Obstacles

The argument against an immediate formal invitation: some allies—notably the United States under Trump—fear that such a decision would be interpreted by Russia as a provocation that would preclude any future negotiations. This fear is understandable in theory, but it has a limitation: if Ukraine is not in NATO and the war ends without adequate security guarantees, the next Russian aggression is only a matter of time.

One possible compromise—which is being discussed in allied capitals—is to offer Ukraine a “fast-track invitation” with realistic preconditions, a clearly defined post-conflict accession timeline, and transitional security guarantees pending formal membership. This type of compromise would allow Zelensky to return from Ankara with something concrete—not immediate membership, but a credible path that changes Putin’s calculations regarding the costs of future aggression.

Ukraine’s NATO membership is the issue that many allies want to avoid in Ankara because it is difficult. I understand the difficulty. But avoiding difficult questions is not a strategy—it’s a delay. And delaying the issue of Ukraine’s NATO membership leaves the door open to another war. True long-term deterrence, for Ukraine and for European security, depends on membership. Perhaps not today, but with a credible path forward.

Nine Years to Transform the West’s Defense

The goal of 5% of GDP by 2035 gives the allies nine years to transform their defense. That is both a long time and a short time. A long time, because building up industries, training soldiers, and acquiring and integrating new equipment takes time. A short time, because the Russian threat is present now, not in 2035. The tension between the urgency of the current threat and the time required for transformation is one of the Alliance’s major strategic challenges.

To manage this tension, the Alliance’s strategy rests on two parallel tracks: immediate measures to strengthen deterrence now—additional deployments on the eastern flank, accelerated deliveries to Ukraine, and budget increases taking effect immediately—and long-term investments that build strategic capability for 2030 and 2035. Both of these tracks must be pursued simultaneously, and Ankara’s commitments must be clear on both.

The Political Sustainability of Commitments: The Risk of the Electoral Cycle

One of the major risks to achieving the 5% of GDP targets is the political cycle. The commitments made in Ankara in 2026 bind governments that will be re-elected or replaced by elections by 2035. Future governments could renege on these commitments if the domestic political context changes—an economic recession, a rise in anti-NATO political forces, or a ceasefire in Ukraine that would reduce the perceived sense of urgency.

This is precisely why “setting in stone” in Ankara requires more than political declarations. It requires multi-year industrial contracts that create financial commitments that subsequent governments would find difficult to cancel. Legislative reforms that enshrine defense spending targets in national budget laws. NATO monitoring and accountability mechanisms that make backtracking politically costly. This is the institutional architecture that transforms a political promise into a lasting reality.

The political sustainability of defense commitments is the Achilles’ heel of all democratic alliances. What one government promises can be undone by the next. That is why institutions matter as much as individuals—they create constraints that outlast elections. Ankara must build these institutional constraints, not just secure political promises. The difference between the two is the difference between a commitment and a pipe dream.

What Putin Sees in Allied Defense Spending

Spending 5% of GDP on defense is not just an internal Alliance goal. It is also a strategic message to Putin. According to Rutte, Russia currently allocates more than 40% of its federal budget to defense—perhaps close to 50%. If NATO allies reach 5% of GDP, with a collective GDP of $70 trillion, their defense spending would amount to $3.5 trillion per year—about ten times Russia’s estimated total defense spending.

A 10-to-1 ratio in defense spending means that any arms race with the West is a war that Russia cannot win economically. Putin knows this. This is precisely why he was banking on the West’s inability to maintain this spending discipline—on Western “fatigue,” on political divisions, and on electoral cycles that weaken commitments. If Ankara demonstrates that this discipline is real and sustainable, Putin’s strategic calculation loses one of its fundamental pillars.

Russia Faces Structural Exhaustion

While the West debates 5% of GDP, Russia is suffering from “structural exhaustion,” according to the Kiel Institute, as cited in available sources. Its GDP declined by 0.2% in the first quarter of 2026. Its budget deficit exceeds $80 billion. Its sovereign wealth fund is running dry. Its refineries are burning. The combination of a stagnating Russian economy and an allied economy that is massively increasing its defense spending sets a trajectory in which the balance of power is shifting gradually but irreversibly against Putin. This is the strongest strategic argument in favor of Ankara’s commitments.

Zelensky’s sanctions advisor put it plainly: “The Russian economy has reached a dead end.” If NATO maintains its economic pressure through sanctions, if Ukraine continues its strikes on Russian infrastructure, and if the allies move toward the 5% of GDP target—the trajectory becomes unsustainable for Moscow. Not tomorrow morning. Not in six months. But over the course of a few years, the combination of these pressures should force political choices that Putin’s regime would prefer to avoid.

I don’t want to give in to premature triumphalism. Russia has resources and resilience that I do not underestimate. But the comparative economic trajectory—the West heading toward 5% of GDP, Russia with a growing deficit and declining refining output—is a reality that Kremlin strategists see just as clearly as we do. This reality influences their calculations. And that is why Ankara is important not only for immediate security but also for the medium-term strategic dynamics.

Spending More Than 3%: What That Means in Practice

Estonia, Latvia, Lithuania, and Poland are the nations that already spend the most on defense as a proportion of their GDP. Poland allocates more than 4% of its GDP to defense—the highest level among all allies. These countries realized long before others what the war in Ukraine has made clear to everyone: living near an aggressive Russia is not an abstraction—it is a daily reality that requires corresponding investments in security.

In practical terms, this high level of spending translates into massive equipment purchases: Abrams and K2 tanks, advanced air defense systems, long-range artillery, and investments in reservist training. Poland is building one of the most powerful armies in Central Europe—an army capable of holding a front line stretching hundreds of kilometers against a conventional Russian attack. This is not paranoia—it is responsible strategic planning.

Why the major Western European countries are still lagging behind

While the countries on the eastern flank quickly understood the need for massive defense investments, the major powers of Western Europe—Germany, France, Italy, and Spain—are moving more slowly. There are many reasons for this: public opinion that is less aware of the Russian threat; traditions of underinvestment in defense that have been entrenched since the end of the Cold War; defense industries that have scaled back their production capacities and are taking time to rebuild them; and budgetary constraints linked to costly welfare states.

These resistances are understandable but dangerous. If NATO’s major economies do not increase their absolute contribution to defense spending, the 5% of GDP target will remain a goal for small, already overburdened countries and a distant ambition for the economies with the most resources. Ankara must establish accountability mechanisms that will allow for measuring progress and identifying laggards—without causing political rifts within the Alliance.

I return to the imbalance between the eastern flank and Western Europe because it strikes me as one of the deepest flaws in today’s NATO. The countries at greatest risk invest the most—which is fair, but it’s also exhausting for smaller economies. The countries at lower risk invest less—which is understandable, but it’s a problem for collective cohesion. Ankara must begin to correct this asymmetry—not through lofty declarations, but through concrete and binding mechanisms.

32 nations, 32 arsenals: the challenge of standardization

One of the most practical challenges posed by the 5% of GDP target is that of interoperability. If each NATO country spends its additional resources on its own national systems, the increase in spending does not necessarily translate into a consistent increase in the Alliance’s collective power. Combat logistics among allies become a nightmare if each brigade uses different ammunition, incompatible communications systems, and vehicles with non-interchangeable parts.

The war in Ukraine has illustrated this problem in concrete terms. Ukraine has received weapons from dozens of different countries, with standards, maintenance protocols, and ammunition that are often incompatible. This heterogeneity has created logistical challenges that allies must avoid replicating within their own forces. Ankara must therefore not only encourage spending but also direct that spending toward standardized and interoperable systems—an ambition that is more difficult to achieve politically but strategically indispensable.

Multinational Programs as a Structural Solution

The long-term solution to the interoperability problem is the development of multinational armament programs—systems jointly developed and produced by several allies, featuring standardized specifications, economies of scale, and a guarantee of built-in interoperability. OCCAR (Organization for Joint Armament Cooperation) and other multilateral structures exist to facilitate these programs, but they are often slow, complex, and subject to national industrial and political disagreements.

Ankara must push for an acceleration of these industrial cooperation mechanisms. The “tens of billions” in defense contracts announced by Rutte should include a significant proportion of multinational orders—not just discounted domestic purchases. This is the difference between 5% spent in a fragmented manner, which results in high expenditures but fragmented capabilities, and 5% spent in a coordinated manner, which results in a truly strengthened Alliance.

The standardization of NATO armaments is a problem as old as the Alliance itself—and it has never truly been resolved, despite decades of effort. Each country defends its national industrial champions, its specific requirements, and its own military traditions. I do not believe that Ankara will magically solve this problem. But every incremental step toward greater standardization is a real gain for collective coherence. And in the current threat environment, even incremental gains matter.

Nuclear Deterrence in the Context of the War in Ukraine

Behind the discussions about spending 5% of GDP on defense lies a more fundamental issue that few analysts dare to address directly: nuclear deterrence. Russia has repeatedly used the nuclear threat since the start of its invasion of Ukraine in 2022, creating psychological pressure on Western allies that has at times slowed decisions to support Kyiv. This exploitation of the nuclear threat is a strategic reality that conventional budgets alone cannot counterbalance.

France’s decision to open a discussion on extending its nuclear umbrella to other European allies—as mentioned by President Macron—is a sign that some leaders understand that long-term European security requires a rethinking of nuclear deterrence independent of the United States. This debate is delicate, both politically and militarily. But it is unavoidable in a context where the reliability of the U.S. nuclear guarantee under Trump is the subject of legitimate doubts.

5% as a baseline, not a ceiling

It would be tempting to think that if all allies reach 5% of GDP in defense spending, the Alliance’s security will be guaranteed. That would be a dangerous oversimplification. The 5% is a necessary foundation—without sufficient financial resources, no defense strategy can be implemented. But financial resources alone do not create political cohesion, do not resolve interoperability issues, and do not guarantee the psychological resilience of societies in the face of a prolonged threat.

NATO’s true strength has always rested on the combination of actual military capabilities and a collective political will to use them if necessary. The 5% target addresses the capability dimension. The political dimension—the willingness to fight for an ally under attack, even at the cost of domestic sacrifices—cannot be bought. It must be cultivated, nurtured, and demonstrated. This is what Rutte is seeking to build with “NATO 3.0.” And this is why Ankara is not just a budget conference—it is a declaration of shared values.

I conclude this analysis with a renewed conviction: spending 5% of GDP on defense is necessary but not sufficient. What the Alliance sometimes lacks is not money—it is the political will to clearly state what it stands for and why. Ukraine, for its part, has no doubt about what it is defending. It is defending its very existence. This clarity of purpose is a strategic asset that NATO should envy—and that it should strive to develop for itself.

What Success Means in Practical Terms

The Ankara summit will be a success if the 5% of GDP does not remain just a number on a piece of paper. If contracts are signed and fulfilled. If national budgets align with political commitments. If industrial production chains are established to deliver the promised equipment. If NATO’s monitoring and accountability mechanism is robust enough to keep pressure on those falling behind. And if Ukraine receives the weapons systems it needs to hold its ground and win.

It’s an ambitious program. There are reasons to be cautious—summits have a disappointing history of unfulfilled promises. But there are also reasons to be optimistic. The context is unlike anything that has come before. The Russian threat is real, well-documented, and visible to all European citizens. Defense budgets are actually increasing. Industry is investing. And Ukraine, which was supposed to fall in three days, is still standing four years later—a living testament to the effectiveness of Western support when it is provided with resolve.

Ankara’s Legacy for Future Generations

If the Ankara summit delivers on its promises—the 5% of GDP, the contracts, the strengthening of the eastern flank, and support for Ukraine—it will be remembered as the moment when the West decided to take its security seriously after decades of complacency. This will be a legacy that will endure beyond election cycles because it will be set in stone through contracts, laws, and institutional frameworks. That is the true test of Ankara: not what is promised on this July weekend, but what will still be there in five years, in ten years, when other governments are in power and other crises may have made us forget the fires of Kapotnya and the smoke of Ufa.

Ukraine is striking Russian refineries with its drones. Its soldiers are holding the front lines. Zelensky will come to Ankara with proof of the effectiveness of his resistance. He deserves allies who are worthy of his commitment. The 5% of GDP set in stone in Ankara would be a fitting response.

The marble of Ankara—the metaphor I’ve chosen for the title of this article—represents both the permanence and the fragility of political commitments. Marble is hard and durable if cared for. It crumbles if neglected. Commitments to spend 5% of GDP on defense are like marble. They will endure if successive governments honor them and if the public understands their necessity. They will crumble if short-term political pressure outweighs the long-term strategic vision. History will be the judge.

Signed, Maxime Marquette, columnist