NATO Offers to Tweak 5% Spending Goal to Win Spanish Approval | Company Business News

(Bloomberg) — NATO has offered to tweak key language on ambitious defense spending targets to help win support from holdout Spain, before leaders of the military alliance gather on Tuesday.

The draft statement to be adopted at the June 24-25 summit will be changed to “allies’ commit to spending 5% of GDP on defense from “we” commit, according to people familiar with the talks.

The adjustment would introduce a nuance that could provide more flexibility to the commitment, said the people, who requested anonymity to discuss private considerations.

Spanish Prime Minister Pedro Sanchez has voiced opposition to the 5% target — calling it unreasonable and counterproductive for his nation — earning the scorn of US President Donald Trump who derided Spain on Friday as a “low payer” who should step up on defense.

North Atlantic Treaty Organization members will meet in The Hague against the backdrop of Trump’s dramatic insertion of the US into Israel’s attacks on Iran, and as Europe awaits his decision on US troop levels in the region amid Russia’s war against Ukraine.

NATO allies have stepped up pressure on Spain to fall in line over the spending target, after persuading skeptics including Italy and Belgium to come around. NATO Secretary General Mark Rutte is negotiating directly with Sanchez, Bloomberg has reported.

Spanish government officials declined to comment on the new language. Sanchez has offered to increase defense expenditure to 2.1% of GDP but faces pushback at home, including from allies in his government.

While Rutte initially proposed a 2032 date for reaching the spending target, the latest draft pushes that back to 2035. His wish to see mandatory yearly increases has also been stripped, which should make the process easier for spending laggards.

NATO’s existing target calls for member countries to spend 2% of GDP on defense. Under the new target, 1.5% would go to broader defence-related spending such as cybersecurity as well as infrastructure for moving troops and military equipment.

The agreed criteria are broad enough that all allies should be able meet that part of the plan quickly, according to the people. The increase in core defense spending to 3.5% from 2% will be much harder to deliver.

As part of its routine process, NATO will review the kit and troops it deems necessary in 2029. The price tag attached to its capabilities could be tweaked at that point, potentially providing some breathing room for the lowest spenders such as Spain. 

Washington has been pushing for an unprecedented defense expenditure increase, arguing that European allies must take responsibility for their own security.

“I don’t think we should, but I think they should,” Trump said late Friday about reaching the 5% goal, introducing some last minute uncertainty after the US previously said it would commit to the target.

–With assistance from Daniel Basteiro.

More stories like this are available on bloomberg.com