Europe is increasing NATO funding, meets Trump’s goals

NATO defence expenditure has surged in 2024, with 19 of the 32 Alliance members implementing double-digit growth in real terms to their military budgets. Increases by European members continue to be driven by the threat posed by Russia’s war in Ukraine, in addition to the ambition set in the Wales Summit Declaration in 2014 to spend at least 2% of gross domestic product on defence within a decade.

Progress towards the 2% benchmark has been notable, particularly since 2022. According to the latest military-expenditure data released by NATO, 23 members will reach or exceed the 2% of GDP target this year, compared to seven in 2022 and just three in 2014. The data also finds that aggregate spending for the Alliance now exceeds the target level as a proportion of total GDP.

The level of growth implemented by countries to reach the target level in 2024 was significant. Overall, total NATO spending increased by 11% in 2024, compared to 3% in 2023. Growth was even stronger among NATO’s European members, who increased their combined military spending by 19% in real terms in 2024, following not-insignificant growth of 9% in 2023. This is remarkable given that the annual average for 2014–22 was just 3%, and is a stark indication of the deterioration in the strategic environment in Europe. This growth spurt, however, will likely skew underlying trends and, as ever, raises concerns that when funding increases too rapidly, it may not be spent effectively.

Monitoring the breakdown of expenditure is therefore key. According to NATO data, the share of spending on equipment has increased dramatically. In 2014, the average share of the defence budget spent on equipment by European NATO members came to 14%. This has since increased to 32%, again with considerable growth since 2022.

Spending more, more wisely, more clearly