Finance
Rutte says NATO must spend smarter on defence or face bill of 3.7% of GDP
Published by Global Banking and Finance Review
Posted on January 14, 2025
2 min readLast updated: January 27, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on January 14, 2025
2 min readLast updated: January 27, 2026
NATO may need 3.7% GDP for defence, but innovation and joint procurement could reduce this. Current spending goal is 2%.
(Reuters) - NATO chief Mark Rutte said on Monday the alliance's military capability targets may require members to spend as much as 3.7% of GDP on defence but this figure could be reduced with innovation and joint procurement.
U.S. President-elect Donald Trump said last week that NATO members should dedicate 5% of their GDP to defence - a level analysts said would be politically and economically impossible for almost all of the alliance’s 32 members.
NATO estimated that 23 of its members met its current goal of spending 2% of GDP in 2024.
“The 2% is not enough,” Rutte told a European Parliament committee session in Brussels.
New military capability targets emerging from NATO’s internal planning process indicate the alliance would need “north of 3%,” he said.
But he added that joint buying of weapons and equipment, as well as innovation, could reduce the amount of funding required.
“If you deduct that, you don’t have to get to what we are afraid of you would need now, which is 3.6, 3.7 (percent), so you would bring that number somewhat down, but it will be impressively more than the 2%,” he said.
(Reporting by Lili Bayer and Andrew Gray in Brussels; Editing by Christina Fincher)
The article discusses NATO's potential need to increase defence spending to 3.7% of GDP, with a focus on smarter spending strategies.
NATO can reduce spending by innovating and engaging in joint procurement of weapons and equipment.
NATO's current spending goal is 2% of GDP, which 23 members are meeting.
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