Published by Global Banking & Finance Review®
Posted on March 26, 2026
2 min readLast updated: March 26, 2026
Add as preferred source on GoogleNATO Secretary‑General Mark Rutte reports a 20% real increase in defence spending by Europe and Canada in 2025, with the alliance now targeting 5% of GDP by 2035 split into 3.5% for core defence and 1.5% for related investments.
BRUSSELS, March 26 (Reuters) - NATO's European allies and Canada increased defence spending by 20% in 2025 compared to the previous year in real terms, alliance chief Mark Rutte said in his annual report published Thursday, urging NATO members to keep up the momentum.
"I expect Allies at the next NATO Summit in Ankara to show they are on a clear and credible path towards the 5% objective," he wrote, adding that "a strong transatlantic bond remains essential in an age of global uncertainty".
U.S. President Donald Trump has repeatedly demanded that NATO partners significantly boost defence expenditures, as the U.S. administration maintains that European allies should ultimately assume primary responsibility for the conventional defence of the continent.
Trump criticised NATO allies on Thursday, writing in a Truth Social post that NATO countries have done "absolutely nothing" to help with Iran.
"THE U.S.A. NEEDS NOTHING FROM NATO, BUT "NEVER FORGET" THIS VERY IMPORTANT POINT IN TIME!" he wrote.
In his annual report, Rutte said that last year "all Allies reported defence expenditure figures that met or went beyond the 2% target first set in 2014, with many making steep increases in spending."
NATO leaders agreed at a summit last year to spend 5% of GDP on defence and related investments by 2035.
Countries pledged to spend 3.5% of GDP on core defence - such as troops and weapons - and 1.5% on broader defence-related measures such as cyber security, protecting pipelines and adapting roads and bridges to handle heavy military vehicles.
Three NATO countries – Poland, Lithuania and Latvia – already exceeded the new 3.5% target last year, according to the report's estimates.
Several countries including Spain, Canada and Belgium, were at 2%.
In total, the alliance of 32 member countries spent 2.77% of GDP on defence in 2025.
The United States accounted for around 60% of alliance defence expenditure in 2025.
(Reporting by Lili Bayer, editing by Bart Meijer)
Defence spending by NATO's European allies and Canada increased by 20% in 2025 compared to the previous year in real terms.
NATO leaders agreed to a target of spending 5% of GDP on defence and related investments by 2035.
Poland, Lithuania, and Latvia exceeded the 3.5% GDP core defence spending target last year.
The United States accounted for around 60% of NATO's defence expenditure in 2025.
Broader measures include cyber security, protecting pipelines, and upgrading infrastructure to support military vehicles.
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