NATO Secretary General Mark Rutte presented the alliance’s 2025 annual report in Brussels, reporting a near-20% real-terms rise in defense spending by NATO members in Europe and Canada.
Rutte said that, between 2014 and 2025, Europe and Canada more than doubled their annual defense outlays, recording a cumulative real-term increase of 106%. In 2025 alone, those Allies spent $574 billion (about €500 billion) on defense — roughly a 20% real-terms increase over 2024. According to the report, every ally met NATO’s 2% of GDP defense-spending benchmark for the year, and three countries have already reached the new 3.5% objective set for 2035.
The Secretary General pointed to the changed security environment as the reason for the surge: the prolonged war in Ukraine has increased demand for munitions and other consumables, straining stocks and prompting renewed industrial investment to strengthen NATO supply chains.
Key numbers from the report include:
– US defense spending was $838 billion in 2025, a slight year-on-year decline. Despite this dip, the United States still accounts for well over half of total NATO spending. The US share of NATO expenditure fell from 64% in 2024 to 59% in 2025.
– European members (including Turkey) and Canada together contributed $574 billion. Their overall defense spending rose by more than 19% in absolute terms for the second consecutive year.
– Several members reported defense spending barely at or just above the 2% GDP threshold (between 2.00% and 2.05%): Belgium, Canada, Albania, Spain, Portugal, Italy, the Czech Republic, Slovenia, France and Montenegro.
– Leading European spenders — Poland, Lithuania, Latvia, Estonia, Denmark and Norway — allocated a larger share of GDP to defense than the US rate of 3.19%.
– Germany reported defense spending of 2.39% of GDP, about double its 2014 level.
– Only Belgium, Albania and Estonia missed NATO’s guideline to devote at least 20% of defense budgets to new or upgraded equipment.
Rutte recalled last June’s NATO summit in The Hague, where Allies pledged a 2035 target of 5% of GDP for defense-related spending. That target is split into 3.5% for core defense needs and an extra 1.5% for defense- and security-related investments, such as civil preparedness, innovation, critical infrastructure and efforts to boost defense industries. He said the plan is intended to rebalance burden-sharing across the alliance and make NATO fairer.
Looking ahead to the July summit in Ankara, Rutte warned against complacency and urged allies to build on recent gains without delay. He reiterated that Russia remains the most significant and direct danger to peace and stability in the Euro-Atlantic area, pointing to its full-scale invasion of Ukraine, now entering its fifth year, and noting support for Moscow from partners including China, North Korea, Iran and Belarus. Rutte emphasized the continued importance of a strong transatlantic bond between North America and Europe as essential to NATO’s collective security.
Edited by: Sean Sinico