Defence Spending: Who Is Doing What? July 2026

NATO Allies met in Ankara, Türkiye, where they were expected to present credible plans to reach the spending targets approved at the summit in The Hague last year. According to NATO’s latest figures, Allies were again able to increase their budgets; nevertheless, some still face obstacles to doing so.

See the data examined in September 2025

See the data examined in July 2024

See the data examined in April 2024

See the data examined in February 2023

See the data examined in July 2023

The summit in The Hague ushered in a new era of defence spending scrutiny among NATO Allies. NATO’s previous target of 2.0% of GDP, adopted at the Wales Summit in 2014, was replaced by a new target of 5.0% of GDP to be achieved by 2035, consisting of 3.5% for core defence and 1.5% for defence-related projects. Allies have now had a year to push their budgets towards these targets, both to counter threats posed by Russia and to satisfy US ambitions that the European Allies and Canada should take over more responsibility for their own defence. According to NATO’s new estimates (constant 2021 prices and exchange rates), five Allies, Lithuania (5.33%), Estonia (5.11%), Latvia (4.92%), Poland (4.68%) and Greece (3.65%) will already exceed the 3.5% core defence target this year, while four Allies, Denmark, Norway and Sweden and the US, will spend more than 3.0%. Most Allies will stand between 2.0% and 3.0%, with 10 Allies only being slightly above 2.0%. Slovenia will be the only Ally to remain below the 2014 target (1.61%).

Revised figures for 2025, based on official spending data rather than on the Allies’ spending plans, indicate that in 2025, four Allies, the Baltic states and Poland, spent at least 3.5% and 24 Allies more than 2.0% (12 of them only just managing to jump over the 2014 target). Czechia (1.86%), Slovenia (1.57%), and Albania (1.48%) remained below NATO’s expectations.

In 2026, the European Allies and Canada are once again expected to increase their defence budgets to a total of around 634 bn USD, representing 2.53% of their total GDP. The share of the European Allies and Canada is forecast to increase to 42.7% of NATO’s total spending, compared to 40.7% last year and 30.3% in 2021. Nevertheless, their total spending remains far behind that of the US, which is expected to reach 850 bn USD. Furthermore, the predicted increase in the share of the budget from 2025 to 2026 (2.1%) is less than half that from 2024 to 2025 (4.6%). Even so, if trends continue, the Europeans and Canada could spend more than the US by the end of the decade (see Figure 1). In the context of Trump’s critical views of NATO, it would send an important signal towards Washington if the European Allies and Canada were to reach this target earlier.

Progress against the 1.5% of GDP defence-related spending target is not included in the official NATO figures. But during the summit, Estonian Prime Minister Kristen Michal stated that his country already invests almost 7.0% in defence – 5.4% in core defence and 1.5% in defence-related projects, meaning that Estonia would achieve both targets nine years ahead of NATO’s deadline. Other Allies, including some of the bigger ones, are in less fortunate positions and still face challenges increasing their budgets. In France, Italy and the UK, this is mostly due to financial obstacles. Spain, meanwhile, renewed its position against the 5.0% target, while Czechia’s 2026 spending could fall below 2.0%.

Allies have announced numerous core defence procurement projects since the last summit in The Hague. The aim is to significantly improve their own defence capabilities to be prepared for Russian provocations and threats, to ensure burden-shifting within NATO, and to strengthen Europe’s position within NATO. Allies have focused on air and drone capabilities, air defence and maritime procurements as well as tanks and other military vehicles. In Ankara, NATO announced additional multinational procurement projects, including the Airbus A330 Multi Role Tanker Transport, Northrop Grumman Triton high-altitude long-endurance drone, and Saab GlobalEye airborne early warning and control platform. Unsurprisingly, all Allies except Norway will reach NATO’s target to spend 20% on equipment in 2026, with Albania, Luxembourg and Poland reaching 50%, therefore spending more on equipment than on other categories.

In general, NATO Allies are on their way towards the new spending targets, but there are still financial and political challenges to overcome. On paper, the Allies have nine years left to fulfil the targets, but many official sources have suggested that Russia will be able to challenge NATO militarily long before 2035. Furthermore, the cancellation of major projects such as the Future-Combat-Air-System or the German F-126 frigate project are setbacks on the path to enhancing European capabilities. Nevertheless, NATO can remain optimistic that it will be able to announce another increase in defence spending at its next meeting, scheduled in Albania.

The table below gathers data on the Allies’ recent defence expenditure, longer-term expectations and military spending priorities. Military spending priorities do not include possible equipment purchases for Ukraine.

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Views expressed in ICDS publications are those of the author(s).