While NATO’s new 5% of GDP spending target grabbed headlines at June’s alliance annual summit in The Hague, it was easy to overlook a significant clause — tucked away within the final sentence of paragraph three of the communiqué — including “direct contributions towards Ukraine’s defense and its defense industry when calculating Allies’ defense spending.”
There is good news here, and possibly less good news. The commitment holds some promise for increased Ukraine aid, as members will no longer face such stark budgetary tradeoffs between defense spending and support to Ukraine. However, it is not yet clear whether some will argue that their Ukraine aid means less needs to be spent on the domestic deficiencies that NATO’s spending pledge aims to address.
NATO’s 5% of GDP goal is a very considerable increase from the previous 2% figure, first introduced in 2014, which was a target many allies initially struggled to meet. Had military aid to Ukraine been included over the past three years of war, five allies previously under the 2% benchmark would have surpassed it, and qualifying defense spending across the alliance would have increased by $61.6bn in 2024 alone. This is a clear demonstration that military aid to Ukraine can tangibly impact allies’ progress toward the new target.
So who are the big spenders in Ukraine aid? The Nordic and Baltic states consistently register as top contributors — Denmark and Estonia, for example, have sent more than 3% of GDP, most of it military assistance. Averaged over the three years of conflict, the seven largest military aid contributors were all from that region, with an average of 0.38% of GDP per year, compared to the broader NATO average of 0.16%. About half of the NATO allies offered less than 0.1% of GDP.
While levels of support to Ukraine will certainly continue to vary across the alliance, the inclusion of aid suggests heightened solidarity at a crucial time for NATO and Ukraine. Together with The Hague Declaration’s statement that “Russia’s war of aggression against Ukraine poses the gravest threat to Euro-Atlantic security in decades,” the inclusion suggests that Ukraine’s defense is a high priority even if membership itself is not currently on offer.
Embedding aid in annual spending budgets also suggests a longer-term commitment to Ukraine, potentially insulated from fluctuations in domestic politics, and valuable amidst possible movement toward negotiations regarding Russia’s ongoing invasion.
However, changes made in The Hague upend years of precedent designed to measure enhancements in military capability.
Including aid to Ukraine within allies’ 5% goal, along with a vaguely-defined 1.5% of spending for supplementary defense measures, is a stark shift from spending on NATO’s traditional focus of “core defense requirements.” These new categories may also provide opportunities for creative accounting, such as including investments in domestic projects in progress toward NATO’s new spending targets. Therefore, as nations adjust amounts contributed to each area, the critical question arises: Will the new target successfully strengthen NATO military capabilities?
Including aid to Ukraine gives the potentially misleading impression of higher long-term defense spending, regardless of whether actual domestic tradeoffs are made. Anticipating a future beyond the war in Ukraine, it is unclear whether allies would continue the aid if Ukraine’s needs seemed less urgent.
It will be telling to see the balance European allies strike between investing in their own new capabilities and Ukraine aid. While directing defense material and financial support to Ukraine will provide some of Kyiv’s immediate needs, it remains absolutely critical for Europeans in particular to invest in defense innovation and long-term industrial capacity.
Recent European Union policy developments do indeed indicate a shift toward a domestic focus, which may soon lead to increased government backing of defense startups, announcements of new ventures and manufacturing facilities, and reforms that ease borrowing and incentivize production.
One thing is already certain. European NATO no longer needs to choose between aid to Ukraine and progress toward its spending target.
As debate continues regarding whether, and how, allies provide Ukraine with security guarantees, there is a tantalizing opportunity to incentivize both assistance to Kyiv and to the strengthening of European defense, as Russia shows no sign of abating its relentless aggression.
Catherine Debenham is a Transatlantic Defense and Security intern at the Center for European Policy Analysis (CEPA). She is a rising senior at Williams College studying International Relations and French and an inaugural member of Williams’ Global Scholars program. She studied Franco-African politics at Sciences Po in Aix-en-Provence, France.
Maddie Hensley is a Transatlantic Defense and Security intern at the Center for European Policy Analysis (CEPA). She is also a master’s student in Security Policy Studies at the Elliott School of International Affairs and holds a bachelor’s degree in International Studies and Russian from Indiana University.
Jason Israel is the Auterion Senior Fellow for the Defense Technology Initiative at the Center for European Policy Analysis (CEPA). He has twice served the White House National Security Council, most recently as Special Assistant to the President and Senior Director for Defense Policy & Strategy. He is a Captain in the US Navy Reserve.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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