Europe gets creative amid Trump demands to end ‘freeloading’ on defence

Brussels: NATO’s European members are seeking a creative solution to meet Donald Trump’s demands for a massive increase in defence budgets as they rethink their approach to military spending.

Faced with the US president’s push to more than double the alliance’s spending targets, European diplomats are exploring a new method to count military expenditures – one that could expand the definition of what qualifies as defence investments.

A Turkish Navy soldier participates during the NATO Dynamic Mariner/Flotex-25 naval exercise in Barbate, southern Spain. European countries are expected to increase their expenditure on defence.Credit: AP

The contentious issue of increased allied investment will dominate discussions this week as US Secretary of State Marco Rubio meets with NATO’s foreign ministers at the alliance’s headquarters in Brussels. It is the latest chapter in an ongoing saga that has tested trans-Atlantic relations, with military outlays emerging as a major point of contention between Washington and its European allies since Trump’s first term in office.

Trump has long insisted that NATO members increase their defence spending from the current 2 per cent of gross domestic product (GDP) – a target agreed upon in 2014 – to 5 per cent. While European nations have publicly balked at such a steep hike, many pushed last year for a compromise of 3 per cent.

But key Trump administration figures, including Defence Secretary Pete Hegseth and Vice President J.D. Vance, want a “free-riding” Europe to make up for decades of underinvestment. The US spends roughly 3.4 per cent of its GDP on defence.

There is growing consensus among NATO’s 32 member states for a more modest 3.5 per cent target, a figure that balances Trump’s demands with the economic realities of Europe’s military budgets.

However, European countries are also pursuing a more unconventional route to meet these targets, broadening what is included in NATO’s military spending calculations. Current guidelines on what qualifies as defence spending are strict, but informal discussions are underway to expand the list of eligible expenditures, officials said. Proponents argue that this is necessary in light of evolving threats and the nature of modern warfare.

A blown bridge lies in the Siverskiy-Donets river in Bogorodychne, in the Donbas region of eastern Ukraine last year.Credit: Getty Images

One avenue being considered to help meet Trump’s demands is including national spending on infrastructure vital to military operations. While NATO includes some military infrastructure in its calculations, civilian infrastructure – such as transport networks and ports, which could be repurposed for military use during a conflict – currently does not count. Expanding the scope to include these “dual-use” technologies would allow European nations to boost their military-related outlays without breaching their budgets.

Historically, NATO’s European members built infrastructure that could quickly support military mobilisation, but after the Cold War, such preparations were neglected. Russia’s recent aggression in Ukraine has forced a reassessment of these capabilities, and some see expanding the definition of military spending as a way to address these gaps.

Secretary-General Mark Rutte, who has echoed Trump’s call for a significant increase in defence budgets, acknowledged the complexity of the situation. He said the new target would be “well north of 3 per cent”.

“The world is more dangerous than it has been in decades, but achieving these targets requires time and strategic planning,” Rutte said. “Our priorities are clear, we are building a stronger, fairer and more lethal alliance – that’s what we need to secure our future.”

He said the Americans had stated “again and again” they were committed to NATO, but that came “with a clear expectation, the expectation that on this side of the Atlantic and Canada, we will spend more” on defence.

Since Russia’s annexation of Crimea in 2014 and its invasion of Ukraine in 2022, NATO’s defence posture has evolved, with countries along its eastern flank – especially Poland, Lithuania, and Estonia – already spending well beyond the 2 per cent target. Twenty-three countries are estimated to be meeting the current guideline. But the prospect of meeting 5 per cent remains a challenge, particularly as many economies face sluggish growth and rising geopolitical tensions.

In response to the challenge, the European Union has taken steps to bolster defence investment. Last year, it established a €150 billion ($257 billion) defence fund to support member states’ defence industries. The EU has also altered its debt rules to exclude military spending from national debt limits, which could help move defence expenditure closer to the 3.5 per cent target by 2030.

NATO officials say that achieving the 5 per cent target under current plans would be difficult due to the time needed to train new troops, acquire weapons, and replenish stockpiles.

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