NATO Leaders Agree To 5% Hike In Defense Spending As Rutte Warns ‘No Opt-Outs Or Side Deals’

As expected, NATO members have agreed to new commitment to significantly boost defense spending, aiming to raise military budgets to 5% of GDP over the next decade—more than double the current 2% benchmark—at the ongoing major annual summit being held in The Hague. NATO’s 32 leaders proclaimed Wednesday: “Allies commit to invest 5% of GDP annually on core defense requirements as well as defense-and security-related spending by 2035 to ensure our individual and collective obligations.”

The Trump-backed decision is being finalized in Netherlands this week, with NATO Secretary General Mark Rutte having hailed the proposal as a “quantum leap’ during a press briefing. Trump declared Tuesday that we’re with NATO “all the way”. And on Wednesday he’s expected to give a big address, as all eyes are focused on the Iran bombing and what’s next.

Bloomberg notes, also as fully expected and long ago previewed, that the spending target includes 3.5% via core defense and 1.5% in related investment covering infrastructure and cybersecurity.

Rutte and officials gathered in the Netherlands have stressed that all member states must participate, highlighting that Spain’s hesitation over the steep cost—nearly $90 billion annually—will not exempt it from the pledge. “NATO doesn’t allow for opt-outs or side deals,” he has firmly stated.

The increased funding is intended to dramatically scale up NATO’s military production, including building thousands of tanks and multiplying air defense systems by five, at a moment the alliance is staring down Russia amid the Ukraine war, where Moscow forces are establishing a huge buffer zone in the north and east, and actually increasing territory beyond Donetsk’s western border.

WikiLeaks meanwhile says the arms companies will continue to be the only real winners…

Trump posts message from NATO head Mark Rutte about raising military expenditure (much of which goes to arms companies) to 5% of GDP “Europe is going to pay in a BIG way, as they should, and it will be your win.” pic.twitter.com/vJSoeS8ibz

— WikiLeaks (@wikileaks) June 25, 2025

Rutte has of course identified Russia as NATO’s “most significant and direct threat” and reiterated full support for Ukraine, despite Washington having named China has America’s ‘top pacing threat’ and long-term main miliary and economic rival.

Of course, the alliance has already funneled hundreds of billions of dollars into a conflict with Russia that has resulted in hundreds of thousands of lives on both sides, and all the while Ukraine losing about 20% of its territory.

NATO leaders as of Wednesday have vowed to keep pursuing Ukraine’s path to membership, with Rutte emphasizing that the question of accession was never ruled out, especially not before the war. “There is an irreversible path for Ukraine to join NATO—and that remains true today, and will still be true after this summit,” he has said.

Whether you like it or not: Only one person is in the spotlight at the #NATOsummit: Everyone is focused on Donald #Trump. Secretary General Rutte says: Only thanks to Trump will the European members fulfill their defense commitments to counter the threat posed by Putin. #Nato pic.twitter.com/FlTVPljII6

— Florian Harms (@FAHarms) June 25, 2025

All of these pledges are new commitments were no surprise after Trump long pushed for drastically ramped-up spending, but perhaps the only surprise is that Ukraine’s President Zelensky finally swapped out his green uniform for a black suit (of sorts)…

Dressed to impress? Zelensky must want into NATO very, very badly.