Sixteenth Annual South China Sea Conference
July 7, 2026 • 9:00 am – 4:00 pm EDT
Hosted by Southeast Asia Program
What Does NATO Defense Spending Look Like Heading into the Ankara Summit?
Photo: Andrew Harnik/Getty Images
Defense spending will continue to be a major topic in discussions at the 2026 NATO Summit in Ankara, Turkey, from July 7 to 8. The 2025 summit in The Hague concluded with a commitment by allies to spend 3.5 percent of GDP on defense investments by 2035 and an additional 1.5 percent of GDP on “broader defence- and security-related areas,” an update on the 2014 Wales Summit agreement for allies to aim to spend 2 percent of GDP on defense. Below are five questions on NATO defense spending levels ahead of this week’s Ankara Summit.
Q1: What defense spending provisions did NATO allies agree to at the 2025 Hague Summit?
A1: In the declaration issued at the conclusion of last year’s summit at The Hague, NATO heads of state committed that their governments would spend a total of 5 percent of GDP on defense and security activities by 2035. The declaration cited Russia’s long-term threat to “Euro-Atlantic security” and the “persistent threat of terrorism” as justification for this commitment. Spain reached an agreement with NATO to be exempted from the spending target.
The 5 percent commitment encompasses two categories of spending. By 2035, allies must spend 3.5 percent of GDP on traditional defense activities—based on the “agreed definition of NATO defence expenditure”—and submit annual plans detailing how they will reach that level. NATO members must spend an additional 1.5 percent of GDP on “broader defence- and security-related” spending, such as investments to defend critical infrastructure and networks, bolster civil resilience, and strengthen defense industrial bases.
The Hague Summit spending commitment reflected an update to the previous spending benchmark agreed to by NATO heads of state in 2014 at the Wales Summit. Responding to Russia’s annexation of Crimea earlier that year, the allies agreed to aim to spend 2 percent of GDP on defense, as well as 20 percent of their annual defense budgets on equipment. The Hague Summit did not specify a new equipment spending target; its requirement for annual spending plans from individual states also marks a departure from the Wales agreement.
The Hague Summit declaration also specified that the “trajectory and balance of spending” under the 5 percent commitment would be reviewed in 2029 based on the “strategic environment and updated Capability Targets.”
Q2: How much are NATO allies currently spending on defense?
A2: While NATO allies have until 2035 to meet the 3.5 percent spending threshold, three states met that benchmark in 2025 according to estimates from the NATO secretary general’s annual report. Poland, Lithuania, and Latvia, respectively, are estimated to have spent the most on defense as a percentage of GDP in 2025. Figure 1 compares allied spending levels as a percentage of GDP in 2014, 2022, and 2025.
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All 31 NATO allies are estimated to have reached the 2 percent spending threshold outlined at the Wales Summit as of 2025 (excluding Iceland which has no armed forces). That represents a significant increase on only the 7 members out of 29 who spent 2 percent in 2022 and 3 members out of 27 in 2014.
Measured in terms of actual spending in 2021 dollars, the United States led the way with estimated expenditures of $838 billion, based on NATO reported data. As Figure 2 shows, Germany, the United Kingdom, and France are estimated to have spent the most in 2025, respectively, of European NATO members and Canada.
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Q3: How have NATO defense spending levels evolved since Russia’s invasion of Ukraine in 2022?
A3: Russia’s invasion of Ukraine in 2022 has led to a significant and more immediate increase in defense spending from NATO members, particularly when compared to spending levels following Russia’s 2014 annexation of Crimea. Despite the Wales Summit spending benchmark, total NATO defense spending grew by 12 percent, adjusted for inflation, between 2014 and 2022, as Figure 3 shows. However, spending by European allies and Canada increased 33 percent in real terms over that time.
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Following Russia’s 2022 invasion, NATO’s topline defense spending is estimated to have grown by 23 percent in real terms between 2022 and 2025. Over that period, European allies and Canada increased their spending by an estimated 54 percent, adjusted for inflation.
As Figure 4 shows, all NATO allies with the exception of Greece increased defense spending above inflation between 2022 and 2025. Measured in 2021 dollars, the United States increased its spending the most, by nearly $59 billion. German defense spending significantly grew by over $40 billion over that period followed by Canada and Poland at approximately $19 billion and $17 billion, respectively.
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Q4: How have NATO members allocated their defense spending across different categories?
A4: NATO reports defense spending across four categories: equipment, personnel, infrastructure, and other. The Wales Summit declaration stated that NATO allies should aim to spend 20 percent of their defense budgets on equipment, including research and development. Spending on equipment bolsters NATO’s capabilities and warfighting potential more than spending on military personnel of individual member states.
Since 2014, the average percentage of defense spending NATO members have allocated to equipment has grown considerably, from 13 percent to nearly 32 percent in 2025, based on analysis of NATO data. Personnel still accounts for the largest category of spending on average across NATO members, though it has fallen from almost 60 percent in 2014 to 35 percent in 2025.
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Q5: What will be on the agenda at the 2026 Ankara Summit?
A5: Despite the commitment made at The Hague Summit last year, defense spending will likely continue to be a major feature of the agenda in Ankara. NATO has highlighted defense investment, defense industry, and support for Ukraine as three key topics for consideration at this year’s summit. Discussions on defense spending may focus on how allies are delivering on their commitment to increase spending to 3.5 percent of GDP and the areas in which investment should be directed. As part of the summit, NATO is also hosting a Defence Industry Forum to bring together allied officials and industry representatives to discuss progress on boosting spending and production, including announcements of new agreements and initiatives.
President Trump and U.S. officials will likely continue to emphasize their call for NATO allies to spend more on defense. At the June 2026 NATO Defense Ministerial in Brussels, Secretary of Defense Pete Hegseth chastised some NATO members for failing to “show a credible path to meeting their Hague commitments” while acknowledging that others have made progress. In the same speech, he announced that the Department of Defense would conduct a six-month review of U.S. force posture and basing in Europe. Hegseth also stated that the United States’ “annual NATO dues” would be “contingent on other countries meeting their defense spending targets,” potentially referring to the direct contributions the United States makes to fund collective NATO operations, capabilities, and its command structure. NATO’s common funds, which the United States contributes a percentage of, totaled approximately €4.6 billion (over $5.2 billion) in 2025. The United States is responsible for contributing approximately 14.9 percent of NATO common funds based on a cost-sharing formula derived from NATO members’ gross national income.
Seamus P. Daniels is a fellow for Defense Budget Analysis in the Defense and Security Department at the Center for Strategic and International Studies (CSIS) in Washington, D.C.