COLUMN: Spain and Portugal Are Finally Catching Up on Their NATO Contributions

A four-year acceleration compared to the original timeline

Portugal has followed an equally remarkable trajectory. Prime Minister Luís Montenegro had initially set a target of 2% of GDP for 2029, before announcing on June 5, 2025, that the country would reach that threshold as early as 2025—four years ahead of schedule. This announcement was all the more notable given that, according to the World Bank, Lisbon had been among the Alliance’s lowest defense contributors for decades.

According to the NATO report published in March 2026, Portugal did indeed cross this symbolic threshold, with record spending of 6.118 billion euros—a 37% increase from 2024 and nearly double the 3.563 billion euros spent just three years earlier.

Unreserved Commitment to the New 5% Target

Unlike Spain, which negotiated some flexibility regarding the new 5% of GDP target by 2035 set at the Hague summit, Portugal accepted this new target without apparent reservation, committing to allocate 3.5% of GDP to traditional military spending and an additional 1.5% to expanded defense initiatives, including cybersecurity and strategic infrastructure.

Portuguese Foreign Minister Paulo Rangel stated that the country plans to increase its defense budget by 450 million euros annually to gradually move toward this ambitious goal in the coming years.

Portugal’s stance—fully embracing the new 5% target without seeking loopholes, unlike other allies—deserves to be commended. This is exactly the kind of unequivocal commitment the West must demonstrate in the face of Russia and its authoritarian allies.

The Hague Summit and the Birth of the 5% Goal

At the Hague Summit held in June 2025, the 32 NATO member countries collectively committed to increasing their security and defense spending to 5% of GDP by 2035—a target more than double the previous 2% threshold set in 2014. This commitment breaks down into 3.5% of GDP for traditional military spending and 1.5% for broader defense initiatives such as cybersecurity and resilient infrastructure.

This new target, described as historic by several analysts, reflects a collective awareness of the persistent Russian threat since the 2022 invasion of Ukraine, as well as pressure from the Trump administration for European allies to shoulder a greater share of the burden of their own defense.

National Trajectories Remain Uneven Despite the Common Goal

Despite this common goal, national trajectories remain uneven: Poland, Lithuania, and Latvia were already exceeding the interim threshold of 3.5% as early as 2025, while Spain, Portugal, Belgium, Albania, and Canada were barely meeting the minimum level of 2%, confirming that the path toward the final 2035 target remains a long one for several allies on the Alliance’s southern and western flanks.

Secretary General Mark Rutte has also expressed his expectation that the upcoming summit in Ankara will enable all allies to present a clear and credible path toward this 5% target—a diplomatic push explicitly aimed at countries still lagging behind on this trajectory.

I note with some frustration that Spain continues to seek compromises rather than making a full commitment, unlike Portugal. Faced with an adversary as determined as Putin’s Russia, half-measures will simply not be enough to guarantee the collective security of the West.

A Shift in Mindset Praised by the Secretary-General

Presenting his annual report in Brussels on March 26, 2026, Mark Rutte stated, “The figures in the report speak for themselves,” adding that “we have made significant progress on defense spending, and NATO is stronger today than it has ever been.” This statement reflects the Secretary General’s satisfaction with the extent to which several historically reluctant allies have caught up.

Rutte also emphasized: “For too long, European allies and Canada have been overly dependent on U.S. military power. We have not taken sufficient responsibility for our own security. But there has been a real shift in mindset,” an implicit acknowledgment of the pressure exerted by Washington in recent years.

U.S. pressure that has borne fruit

This development cannot be separated from the constant pressure exerted by U.S. President Donald Trump, who has repeatedly urged NATO members to significantly increase their defense spending, insisting that European allies must assume primary responsibility for the continent’s conventional defense.

While the methods of pressure employed by the U.S. administration may have offended certain diplomatic sensibilities in Europe, the concrete result—namely, the rapid catch-up by countries such as Spain and Portugal—demonstrates that this American insistence has produced measurable effects on the budgetary front.

I’ll say it plainly: Trump remains a necessary evil to force Europe to shoulder its defense responsibilities. His methods are brutal—sometimes even humiliating for our allies—but the results are clear, laid out in black and white in the NATO report.

Industrial Benefits and Job Creation

Spain’s 10.5 billion euro plan goes beyond the purchase of military equipment: according to estimates by the Sánchez administration, this initiative is expected to create more than 36,000 direct jobs and approximately 60,000 indirect jobs, most of which will offer skill levels and salaries above the Spanish national average.

The Spanish government also estimates that this plan could boost national GDP by 0.4 to 0.7 percentage points, while increasing government spending on research and development by 18%—an economic ripple effect that extends far beyond the defense sector alone.

Funding That Preserves Social Gains, According to Madrid

Notably, for a country that has historically been cautious on budgetary matters, the Spanish government has emphasized that this plan will be funded “without taking a single cent from the welfare state,” in the words of Pedro Sánchez himself—without raising taxes or increasing the public deficit—an ambitious promise given the scale of the sums involved.

This approach contrasts with the fears expressed by some European analysts, who worry that the escalation of defense spending across the continent will ultimately weigh on the public finances and debt of several member states by the end of the decade.

I am watching this Spanish pledge to fund rearmament without cutting social benefits with interest. If it holds, it could serve as a reassuring model for other European countries hesitant to invest more in their defense for fear of unbearable social costs.

A Modernization Effort Focused on the Navy and Naval Capabilities

According to an analysis by the Heritage Foundation, Portugal plans to direct a significant portion of its new investments toward the Portuguese Navy, anti-submarine warfare operations, and stability missions in Africa—priorities that reflect the country’s strategic Atlantic geographic position within the Alliance.

Unlike Spain, Portugal has made an unambiguous commitment to NATO’s new standard setting a minimum of 3.5% of GDP for core military spending, which is expected to free up substantial additional funds for these priorities between now and 2035.

A country that has long underinvested in its military capabilities

It is worth noting that, according to World Bank data, Portugal had not exceeded the 1.6% of GDP threshold for military spending in twenty years, making its current catch-up all the more significant for a country historically ranked among the lowest contributors in the entire Atlantic Alliance.

This rapid transformation illustrates the ability of a small European country to significantly reorient its budgetary priorities when the geopolitical context demands it—a lesson that other, more reluctant allies would do well to heed.

Portugal, often perceived as a secondary player within NATO due to its modest size, demonstrates here that a sincere commitment matters more than a country’s gross economic weight. This is a lesson in humility for larger powers that are still dragging their feet.

The Invasion of Ukraine as a Catalyst for European Rearmament

This catch-up by Spain and Portugal cannot be understood without placing it in the context of Russia’s invasion of Ukraine since February 2022, which has fundamentally transformed perceptions of security threats across the European continent, including in countries on the southern flank that have historically been less exposed to Vladimir Putin’s territorial ambitions.

This realization has been accompanied by a gradual acknowledgment—including in Madrid and Lisbon—that the collective security of the North Atlantic Treaty Organization (NATO) rests on an equitable sharing of the financial burden among all members, rather than on excessive dependence on U.S. military power.

U.S. Spending Remains Dominant Despite Europe’s Catch-Up

Despite this notable progress, the United States will continue to account for approximately 60% of the Atlantic Alliance’s total defense spending in 2025—an imbalance that justifies Washington’s continued pressure on European allies to further accelerate their investments in the coming years.

This observation serves as a reminder that, despite the real progress made by Spain and Portugal, the path toward a truly balanced sharing of the Western defense burden remains long, particularly in the face of adversaries such as China, Iran, and North Korea, which are also strengthening their respective military capabilities.

Faced with an authoritarian axis that includes Russia, China, Iran, and North Korea, I can only conclude that even this encouraging progress by Spain and Portugal remains insufficient. The West cannot afford to relax its efforts, regardless of the progress made so far.

Persistent Concerns About Fiscal Sustainability

Several European analysts, notably those cited by the European Parliament, are warning of the long-term fiscal risks associated with this escalation in defense spending, fearing a rise in public debt in several Member States after 2029, once the initial, more favorable financing phases have run their course.

These concerns apply particularly to Portugal, whose nominal GDP remains modest compared to other European economies, raising legitimate questions about the country’s ability to maintain its ambitious trajectory toward 5% of GDP without affecting other essential budgetary priorities.

Spanish Skepticism Toward the Final 5% Target

Unlike Portugal, Spain has expressed notable skepticism regarding the final target of 5% of GDP, actively advocating for greater flexibility and an extended timeline rather than immediately committing to the full trajectory adopted by the majority of its Alliance partners at the Hague summit.

This Spanish reluctance, while understandable from a budgetary standpoint, illustrates the persistent tensions within the Alliance itself between the collective need to strengthen Western defense and the specific national economic constraints of each member country.

Spain’s reluctance regarding the 5% target leaves me perplexed, even though I understand the budgetary constraints cited by Madrid. At a time when Russia shows no signs of restraint, every additional hesitation on the part of our European allies deeply concerns me.

A Sharp Increase in the European Average

The average defense spending of European allies and Canada is projected to reach 2.33% of GDP in 2025, compared to 1.97% the previous year, according to data cited by several specialized analyses, confirming a collective trend toward strengthening that goes far beyond the cases of Spain and Portugal alone.

This collective increase—driven in particular by countries that have historically lagged behind catching up—strengthens the credibility of the North Atlantic Alliance as a whole in the face of recurring criticism regarding the unequal sharing of the financial burden among its members.

The upcoming Ankara summit will be decisive

The upcoming Ankara summit will be a major test to determine whether this positive momentum continues, particularly for countries like Spain, which will need to clarify their definitive position regarding the ambitious target of 5% of GDP by 2035—a deadline that is approaching faster than it seems for national budgets already under strain.

The results of this summit will help determine whether the spectacular catch-up seen in 2025 continues on its current trajectory, or whether certain allies, once the symbolic 2% threshold is reached, will slow their efforts before achieving the more ambitious goals collectively set by the Alliance.

Spanish and Portuguese Companies Reaping the Benefits of the Budgetary Windfall

This budgetary catch-up directly benefits the national defense industries of both countries, which are securing a growing share of new contracts linked to Spain’s industrial and technological plan as well as Portuguese investments in naval modernization and strategic infrastructure.

This trend is fostering the emergence of a more robust defense industrial base in countries where this sector has historically been modest—a development that could generate lasting economic benefits well beyond the budgetary horizon set for 2035.

Gradual Integration into European Supply Chains

These new investments also enable Spain and Portugal to integrate more closely into European defense supply chains, thereby strengthening the continent’s strategic autonomy in the face of a historical dependence on U.S. military equipment.

This industrial integration is part of the European Union’s broader commitment to strengthening its common defense industrial base—a goal that aligns with NATO’s efforts to achieve a more equitable sharing of the financial burden among allies.

I see this industrial growth as an opportunity for Southern Europe to move beyond merely consuming imported security and instead contribute directly to the Western defense industrial base. It is a welcome sign of strategic maturity.

Italy: A Similar Case That Still Lags Behind

Italy, another major economy in southern Europe, remains comparatively behind despite announcements that it will double its defense spending over four years, according to an analysis by the European Parliament. Italy’s lag contrasts with the faster progress made by its neighbors, Spain and Portugal, over the past year.

This regional comparison illustrates that the catch-up is not uniform across the Alliance’s southern flank, with some countries progressing more rapidly than others despite similar diplomatic pressure from Washington and the NATO Secretary General.

Greece: A Historical Counterexample of High Spending

Conversely, Greece has long maintained defense spending above the European average, due to persistent regional tensions with Turkey—a reminder that military spending levels within NATO are also shaped by regional geopolitical considerations specific to each member country.

This diversity of national situations illustrates the complexity of coordinating a common target of 5% of GDP among countries with geopolitical, economic, and historical realities as diverse as those of Spain, Portugal, Italy, and Greece.

This mosaic of national situations within NATO’s southern flank itself reminds me that Western unity is never a given once and for all. Each country moves at its own pace, shaped by its own history and budgetary priorities.

A Stronger Argument Against Criticism from Washington

This catch-up by Spain and Portugal provides NATO with a concrete argument to counter the repeated criticism from the Trump administration, which has long accused European allies of benefiting from the U.S. security umbrella without bearing a fair share of the costs associated with the continent’s collective defense.

The Alliance’s ability to demonstrate measurable, quantifiable progress—such as that achieved by Madrid and Lisbon—strengthens its negotiating position vis-à-vis a U.S. partner that is increasingly demanding when it comes to sharing the financial burden of Western security.

A momentum that must now be sustained over the long term

The true test of credibility for Spain and Portugal will not lie in reaching the 2% threshold in 2025 as a one-time event, but in their ability to maintain this upward trajectory year after year until the 2035 deadline, without succumbing to the temptation of fiscal relaxation once the initial goal has been achieved.

The NATO Secretary General’s upcoming annual reports will reveal whether this commitment translates into continuous progress, or whether certain allies are content with a symbolic minimum without continuing their efforts toward the more ambitious goals set collectively.

I will be closely monitoring these upcoming annual reports, because a one-time commitment is worthless without continuity. NATO’s history is rife with unfulfilled budget promises, and I refuse to succumb to naive optimism until the full trajectory toward 2035 is confirmed over the long term.

European Defense Spending on the Rise

Financial markets have reacted positively to this wave of continental rearmament, with shares of major European defense companies posting substantial gains since the announcement of the 5% of GDP target at the Hague summit—a sign that investors anticipate years of sustained growth for this sector.

This market confidence reflects the growing conviction that the commitment by European governments—including those of Spain and Portugal—to increase military spending is not merely a one-off announcement but rather a lasting structural shift in national budget priorities.

A sector that is now attracting institutional investors

This momentum is also attracting institutional investors who were previously reluctant to finance the defense industry for ethical or regulatory reasons—a shift in attitude that reflects the changing geopolitical landscape since Russia’s invasion of Ukraine in 2022.

According to several financial analysts, this shift in market sentiment is a further indicator of the long-term credibility of the West’s commitment to strengthening its collective defense capabilities in the face of persistent threats from Russia and its allies.

Seeing the financial markets themselves betting on the sustainability of this European rearmament reinforces my belief that this is not a passing fad, but a profound structural shift in the West’s strategic posture in the face of a more dangerous world.

Real but Still Fragile Progress

Spain and Portugal’s progress in defense spending represents a real and measurable step forward for the cohesion of the North Atlantic Alliance, but it remains fragile until these two countries confirm a clear and sustained path toward the ultimate goal of 5% of GDP set for 2035.

This very real progress must not obscure the road that still lies ahead in the face of determined adversaries such as Russia, which continues to invest heavily in its military despite the Western sanctions that have been weighing on its economy since 2022.

I choose to acknowledge this progress without naivety: it is encouraging, but it will not be enough on its own to guarantee Europe’s security if political will were to waver in the years ahead.

A Lesson in Perseverance for the Entire West

What makes this story particularly instructive is the demonstration that even historically reluctant and underfunded countries can make a rapid budgetary shift when political will and diplomatic pressure converge sufficiently. Spain and Portugal thus offer an encouraging example for other allies who are still dragging their feet when it comes to their obligations toward Western collective security.

As I conclude this column, what stands out most to me is that political will, when truly mobilized, can reverse decades of budgetary inertia in barely two years. May this lesson inspire other Western allies who remain hesitant in the face of the Russian threat.

Signed, Maxime Marquette, columnist