The collected membership of Nato meets in The Hague on June 25 for a cutdown version of the annual gathering, where Ukraine has been dropped from the agenda and the only thing that will be discussed is increasing defence spending to 5% of GDP, at US insistence.

Three months ago, Secretary of State Marco Rubio attended a ministerial meeting in Brussels with a clear message: the 5% demand was not a joke. After some initial pushback, desperate to keep the US security umbrella open, every one of the 32 members has agreed to the increase that must be met by 2035, except Spain and Slovakia.

The White House is dominating the agenda at the meeting and has forced several compromises. The increase will be divided into 3.5% for "hard defence, 1.5% for infrastructure/cybersecurity, with the US hoping the bulk of the hard spending will go on US-made weapons. Participants at the ministerial meeting later revealed, off the record, that Rubio had warned the partners: either they accept the US demand or Trump will reduce the American military presence in Europe.

In 2024, European Nato members together spent nearly $500bn on defence, or 2% of their combined GDP. An increase to 3% would mean an additional $250bn annually. Up to half of that could go directly towards weapons and ammunition.

In addition to the cash infusion, the Alliance has prepared a classified document on "capability targets", which also calls for large increases in the number of brigades and key weapon systems each Nato member must possess for effective collective defence.

The new strategy outlines the requirements for core defence capacities, including the scale of air and missile defence systems, the number of long-range weapons held by allies, an increase from the 80 brigades Nato currently maintains and key logistics parameters. Currently, Nato operates under capability targets approved in 2021, prior to Russia’s full-scale invasion of Ukraine.

For instance, Germany currently has 20% fewer brigades than its 2021 requirement. The new document presented to ministers in June now proposes a much larger increase in European armies – the target may rise to 130 brigades. European Nato armies may need to nearly double in size.

Another major challenge is the limited capacity of Europe’s defence industry. As bne IntelliNews reported, despite the outbreak of a major traditional large-scale war in its backyard, Europe have failed to sign off on the long-term contracts defence companies need to invest into new production. Despite entering the fourth year of full-scale war on its borders, Europe still hasn’t scaled up enough to meet demand from European defence ministries. European Commission President Ursula von der Leyen admitted in her ReArm speech (video) earlier this year that Russia is now outproducing all of the EU and Ukraine combined.

Ukraine’s downgrade

The meeting will be much reduced compared to previous summits after all the events other than the welcome dinner in the castle of the Dutch royal family and a single two-hour discussion on spending the next day. In particular, the Ukraine-Nato council meeting to discuss the conflict with Russia has been cancelled and Ukrainian President Zelenskiy has only been invited to the dinner, not the plenary session, Ukrainska Pravda reports.

In place of the Ukraine-Nato council meeting, Zelenskiy is due to have a meeting with Rutte and the leaders of the so-called European Five (E5) countries – France, Germany, Italy, Poland and the United Kingdom. Italy is a new addition to the top four leaders of the coalition of the willing (CoW4) that has taken the lead in Europe in supporting Ukraine.

Initially, Ukraine was not invited to attend the summit at all, but was reinstated at the instance of European Commission President Ursula von der Leyen and Nato Secretary-General Mark Rutte. Some uncertainty surrounded the participation of Zelenskiy, who is now due to attend, but it remains unclear whether he will meet with US President Donald Trump, who is also due to attend. The two presidents were scheduled to meet at the recent G7 summit in Canada, but Trump skipped out early, cancelling his meeting with Zelenskiy.

The members have also decided to forego the traditional joint statement and will only release a single paged statement after the meeting. While the US is insisting on an increase in spending to 5% of GDP, up from the previous 2% commitment adopted in 2014 at the Welsh Nato summit, nominally to meet a growing threat of attack by Russia, all mentions of Russia have been downgraded in the draft version of the final statement. The draft does label Russia as a "threat" to Euro-Atlantic security but refrains from designating it as an "aggressor" for waging a war in Ukraine – language the White House has shown itself particularly adverse to.

Responding to the Russian threat

While the White House is playing down any threat from Russia, Rutte has put the growing threat from Russia and China at the heart of the rationale for increasing spending on defence.

“Russia has brought war back to Europe and has teamed up with China, North Korea and Iran to reshape the global order. Together, they are expanding their militaries and their capabilities,” Rutte said in an opinion piece for Foreign Policy calling for a stronger Nato. “Russia is reconstituting its forces with Chinese technology and producing weapons faster than we thought it could.”

European Commission President Ursula von der Leyen is also pushing for more spending to meet the same threat. She warned in her ReArm speech (video) that Russia is currently outproducing all the EU and Ukraine combined and that Europe needs to re-equip itself urgently. This year alone Russia will roll out 1,500 tanks, 3,000 armoured vehicles and 200 Iskander missiles and could be able to challenge Nato directly within five years, says Rutte. Europe will need to boost its weapons production by 400% to effectively deter Russia, analysts say.

The Nato boss also singled out China as a threat, which he accused of becoming “decisive in enabling Russia’s war against Ukraine and supporting Russia’s defence industrial base,” even as it “with no transparency, modernises and expands its own military at breakneck speed.”

China has already overtaken the US and now possesses the world’s largest navy and is adding the equivalent of the entire French navy every four years. It will soon also overtake the US submarine fleet; one of the reasons why China is so fixated on taking control of Taiwan is that its own territorial waters in the Taiwanese Straits are very shallow, making it easy for US spy satellites to see Chinese subs come and go, whereas the waters on the eastern side of Taiwan drop off precipitously and would allow China to deploy its submarine fleet undetected.

China is rearming and will also be able to challenge Nato directly. Its overall battle force is expected to grow to 395 ships this year, and to 435 by 2030, says Rutte. China also aims to have more than 1,000 operational nuclear warheads by 2030. “China’s ambitions and coercive policies challenge our interests, security and values,” said Rutte.

“We cannot afford to hope for the best; we must prepare for the worst. It is clear that those who stand against freedom are readying themselves for long-term confrontation with Nato,” Rutte added.

Seoul has withdrawn from the upcoming Nato summit in The Hague in protest of the US attack on Iran.

5% GDP target except for Spain, Slovakia

Rutte is on board with the US call for member states to up their spending to 5% of GDP by 2037. All allies will spend at least 2% of GDP on defence this year, as promised at the Wales summit in 2014. However, most members have undershot: by 2021, only six members had reached the benchmark. At The Hague summit members are expected to make a new pledge to increase their country’s spend to 5% and Washington is insisting this time round there be no cheating, the US Ambassador to Nato Matthew Whitaker said earlier this month.

"Five per cent spending will be necessary to have the forces and capabilities to implement our defence plans in full and protect the Euro-Atlantic. This will mark a quantum leap in our collective defence," says Rutte.

Germany’s Bundeswehr warned in an internal strategy paper that Russia poses “existential risk” to both Germany and Europe as a whole, Spiegel reported last week. The Bundeswehr says the modernisation of the Russian Armed Forces is progressing rapidly and they could have 1.5mn soldiers by 2026. The Kremlin is mobilising industry and power "specifically to meet the requirements for a large-scale conflict against Nato by the end of this decade," the document said, but added an attack could come as soon as in the next two years.

Going into the summit almost all the member states have agreed to increase spending to 5% of GDP by 2035, but not everyone is on board. Nato gave Spain a calve out that allows it to spend less, Politico reported on June 22.

Likewise, on the eve of the summit, Slovak Prime Minister Robert Fico issued a statement saying that Slovakia had better things to spend its money on than defence and would make up its own mind how much to dedicate to defence. Last year it spent 2.1% on defence and the Finance Minister said earlier that there were no plans to increase sending, except for an incremental increase on dual-use projects such as military related infrastructure investments.

“Today, extensive armament and the possible global military conflict are being discussed significantly more than peace or the improvement of people’s living standards,” Fico said in the statement posted on social media. “In a period of restoring public finances and catching up with the average living standard in the EU, the Slovak Republic has other priorities in the coming years than armament.”

Countries closer to Russia are much keener on increasing spending. Poland has allocated the most to defence this year, 4.12% of GDP called for a much faster schedule to reach 5% by 2030. Nato’s Rutte also wants to go fast and reach the threshold by 2032.

Prime Minister Pedro Sánchez demanded an exemption from the new target saying that Madrid would struggle to meet the 5% spending target. The language of the draft deal on the table was changed from "we commit" to "allies commit" to spend 5% on defence, which allows Spain more flexibility as long as it meets Nato's updated capability targets approved by alliance defence ministers on June 5. Spain also intends to spend only 2.1% of its GDP on defence this year which it says is enough to meet its obligations.

The US has also exempted itself from spending 5% of GDP on defence and its contributions to funding Ukraine have fallen to nothing since the start of this year, with no new money in the pipeline either.

Separately, Ukraine is asking Nato allies to earmark some of their spending to support Kyiv’s struggle against Russia and allocate 0.25% of their GDP to boosting Kyiv's defence production, Zelenskiy said on June 20 at a press briefing.

"Ukraine is part of Europe's security, and we want 0.25% of the GDP of a particular partner country to be allocated to our defence industry and domestic production," Zelenskiy said at the briefing.

Ukraine is currently in talks with Denmark, Norway, Germany, the United Kingdom and Lithuania on weapons development partnerships, Zelenskiy said.

Most of the biggest powers still have a lot of catching up to do. Poland and the frontline states in the Baltics are the only countries anywhere near to spending 5%. Indeed, Poland is the current leader as it aspires to build the largest conversional army in Europe in the next few years. Big countries like Germany, Spain, France and Italy all spent less than 2% last year.

Canada has even bigger difficulties. As a country that shares its only land border with the United States it has not, until recently, faced a direct military threat. Its spending remains far below the 2% defence spending benchmark: Canada allocated just 1.37% of GDP to defence in 2024 – the fifth-lowest level among Nato members.

Luxembourg currently spends 1.29% of GDP on defence, the third-lowest level in the alliance, but as it is so small it simply lacks the capacity to raise its military spending to the levels Nato demands.

These Nato states may seek to "compensate" for their own shortfalls by increasing their Ukraine-related spending, part of which counts towards the 5% of spending benchmark. Ukraine has welcomed this investment into its military production by other countries – the so-called Danish model.

Nato countries spending, 2024 percentage of GDP
Rank	Country	Spending %GDP (2024)	Spending $bn (2024)	Notes
1	Poland	4.12%	$38bn	Highest in Nato, 31% spending surge in 2024, likely ~4.2% in 2025.
2	Estonia	3.43%	$1.3bn	Pledged 5% by 2035, driven by Russian threat.
3	United States	3.38%	$971bn	~66% of total Nato spending, ~$997B projected for 2025.
4	Latvia	3.15%	$1.1bn	Increased spending due to regional security concerns.
5	Greece	3.08%	$7.6bn	Consistently above 2%, driven by tensions with Turkey.
6	Lithuania	2.85%	$2.1bn	Committed to 5% by 2035, near Russian border.
7	United Kingdom	2.50%	$81bn	Pledged 2.5% by 2027, ~$85B in 2025, aiming for 3% later.
8	Finland	2.45%	$7.2bn	New Nato member, spending rose post-2022 Ukraine invasion.
9	Romania	2.44%	$7.8bn	Increased post-2022, near Ukraine, aiming for 2.5% in 2025.
10	Hungary	2.43%	$5.1bn	Reached 2% in 2023, significant rise from prior years.
11	Denmark	2.33%	$9.5bn	Surpassed 2% in 2024, plans to maintain or increase in 2025.
12	Norway	2.07%	$11bn	Exceeded 2% in 2024, driven by Arctic security concerns.
13	Slovakia	2.03%	$2.8bn	Just above 2%, increased post-Ukraine invasion.
14	Montenegro	2.03%	$0.2bn	Small economy, met 2% target in 2024.
15	North Macedonia	2.01%	$0.3bn	Reached 2% in 2024, steady increase in recent years.
16	France	1.96%	$66bn	Below 2% in 2024, plans 3.5% by 2025, ~$70B projected.
17	Germany	1.94%	$88.5bn	Below 2% in 2024, ~$100B in 2025 with special defence fund.
18	Italy	1.50%	$35bn	Below 2% in 2024, aiming for 2% in 2025, ~$35B.
19	Canada	1.40%	$30bn	Below 2% in 2024, slow progress to 2%, ~$30B.
20	Spain	1.30%	$20bn	Below 2% in 2024, pledged 2.1% in 2025, ~$20B.
Source: Nato, bne IntelliNews

Ukraine disappointment

Bankova (Ukraine’s equivalent of the Kremlin) will be sorely disappointed by Ukraine’s downgraded role. Since Trump took office, the US has steadily pulled back from supporting Kyiv. The White House has imposed no new sanctions on Russia at all under Trump, while the EU voted through a seventeenth sanctions package last month and is currently working on an eighteenth. The White House also did not allocate any new weapons deliveries, which is a problem, as Ukraine is reported to be running low on air defence ammunition in particular, and could run out completely by this summer, analysts say.

Zelenskiy caused considerable embarrassment at the Vilnius Nato summit in 2023 by aggressively demanding accelerated Nato membership for Ukraine – demands that were met with a deafening silence by the Nato members.

At the Washington Nato summit in 2024, hosted by the Biden administration. Zelenskiy was told explicitly not to bring up the question of Ukraine’ Nato membership up at all, according to reports, as no one wanted to address the issue. Instead, the Nato members watered down their commitment to the empty rhetorical phrase of “Ukraine’s irreversible path” to eventual Nato membership, without committing to a timeline.

This year even the phrase “irreversible path” for the Washington Declaration has been dropped from the final communiqué, which will only be one page long. For comparison, the Washington summit’s final declaration – including its section on Ukraine – had over 40 points. The Vilnius declaration had 90. The Hague summit statement is expected to only contain five points.

Condemnation of Russia was also excluded from the G7 meeting and no joint communiqué was issued there either, due to US objections. Trump will not hold the conventional joint press conference with Nato Secretary General Mark Rutte after the meetings in the Hague.

Lots of money, but no soldiers

In the Hague the talk will focus almost exclusively on hardware, but it ignores the elephant in the room: what is the point of having lots of tanks if there is no one to drive them, or plenty of guns if there is no one to shoot them?

With just a few days left before Nato’s 2025 summit, The Economist editors wondered in the headline of their June 19 leader: "Europe wants to show it’s ready for war. Would anyone show up to fight?”

A 2024 poll by Gallup asked citizens in 45 countries how willing they would be to take up arms in case of war. “Four of the five places with the least enthusiastic fighters globally were in Europe, including Spain, Germany and notably Italy, where just 14% of respondents said they were up for taking on a foreign foe,” according to this analysis of the poll.

Still, Europe does not lack men and women in uniform. Despite a scything in the number of troops since 1990, to less than half the previous figure in many countries, the continent still has more soldiers than America, and roughly as many as a share of its overall population.

Yet the proposal to send peacekeepers to Ukraine to patrol a potential DMZ if a ceasefire deal had been agreed, proposed by France and the UK, was abandoned as unworkable. The Western allies suggested a force of 30,000 be sent, when military experts said at least 120,000 would be needed to man the 1,200-km long line of contact. That number was downgraded to 10,000 when it became clear European forces simply didn’t have the manpower available, before the idea was abandoned entirely in the face of stringent threats of retaliation by the Kremlin if Nato-back troops appeared on Ukrainian soil.

“The bloc’s citizens list Russia’s invasion of Ukraine and matters of defence as the biggest threats facing the EU as a whole. Well over half think that fighting within the union’s borders is likely in coming years,” The Economist reports. “But asked what issues affect them personally and Europeans forget about Russia altogether, worrying more about inflation, taxes, pensions and climate change than they do about potential invaders. It is not that Europeans don’t see the looming threat. It is that they think it is somebody else’s problem.”