PARIS \u2014 The Netherlands worked out the costs of meeting NATO\u2019s new capability targets, providing a taste of the billion-euro budget challenge European members of the alliance face to boost their military posture in the face of a more aggressive Russia.<\/p>\n
The Dutch calculate that meeting their share of the targets will cost at least \u20ac16 billion to \u20ac19 billion ($18 billion-$21 billion) a year on top of the existing defense budget, Defence Minister Ruben Brekelmans told parliament in a letter last week<\/a>. That would amount to about 3.5% of GDP, from 2% now \u2013 conveniently also the core defense spending target that NATO leadership is calling for.<\/p>\n NATO\u2019s Capability Targets 2025, to be formally set at a summit in The Hague in June, will significantly increase the requirements compared to previous targets, according to the Dutch. The CT25 focus will be on ground-based air and missile defense, ground-based fire support, land maneuver units and joint enablers, Brekelmans said.<\/p>\n For the larger economies of Germany, France and the U.K., meeting the new targets means \u201cwe\u2019re no longer talking about a few billion extra per year, but tens of billions,\u201d said Dick Zandee, senior research fellow at Dutch think tank Clingendael Institute and former head of planning at the European Defence Agency.<\/p>\n The three countries have the biggest defense budgets of European NATO members, spending a little over 2% of GDP on their military. The Netherlands is Europe\u2019s sixth-biggest spender, lifting its 2025 defense budget to \u20ac22 billion euros from \u20ac21.4 billion last year.<\/p>\n U.S. President Donald Trump has repeatedly demanded NATO countries increase military spending to 5% of GDP, threatening to pull out of the alliance if members don\u2019t pay up.<\/p>\n NATO Secretary General Mark Rutte said this week he expects alliance members to agree to a 5% spending target in The Hague, with a proposal for 3.5% of GDP for direct military spending and another 1.5% for related spending such as infrastructure and cybersecurity.<\/p>\n The Netherlands also estimates meeting the new NATO capability targets will require 17,000 to 18,000 more personnel.<\/p>\n While the 32-nation alliance typically keeps the capability targets secret, NATO Supreme Allied Commander Transformation Adm. Pierre Vandier said in March the alliance will ask members to raise military capability targets<\/a> by 30% \u2013 even with allies already 30% behind on delivering on existing goals.<\/p>\n The Dutch say the NATO \u201cstandard path\u201d to fully meet the capability targets has been 19 years, but current threats make a faster build-up necessary, and NATO expects \u201ca significant part will already be built up in the coming years.\u201d<\/p>\n Brekelmans says around \u20ac9 billion to \u20ac10 billion of the calculated costs and 8,500 to 9,000 of the personnel count are attributable to the Netherlands not yet having fully met NATO\u2019s 2021 capability targets.<\/p>\n While NATO defense planning is based on the principle that all the capabilities are realized, \u201cin practice of course, that is never achieved,\u201d Zandee said.<\/p>\n Neighboring Germany and Belgium have similar issues as the Netherlands of having to play catch up with the 2021 targets, with personnel shortages partially explaining the shortcomings, he said.<\/p>\n \u201cAll countries are coming out of roughly two decades of severe budget cuts, all countries to a varying degree donated to Ukraine, reducing stocks and supplies,\u201d Zandee said. \u201cThe Netherlands is not really in a unique position in this regard.\u201d<\/p>\n The calculations by Brekelmans exclude the costs of host nation support, with Dutch responsibility within the alliance for large-scale transfer of military equipment, as well as homeland defense and military activities outside the NATO treaty area, such as the Caribbean Netherlands. That means total defense costs would exceed 3.5% of GDP, according to Brekelmans.<\/p>\n The Netherlands has typically been transparent about the costs of NATO targets, according to Zandee. Publishing the figures serves a political purpose in trying to muster broad parliamentary and coalition-government support for a bigger defense budget, a politically sensitive issue in the country, and gain popular support for more spending, he said.<\/p>\n Spending 3.5% of GDP on core defense is achievable for a country like the Netherlands with healthy public finances, and also quite doable for Scandinavian countries, Zandee said. For countries in southern Europe with high debt levels \u201cit does become a big problem,\u201d for example in France, where more defense spending will mean more borrowing.<\/p>\n Italy, Spain and Belgium, among the NATO members that spend the least on defense relative to their economy, all have government debt to GDP ratios<\/a> above 100%. Greece and France, the other European Union countries in NATO whose debt exceeds GDP, have historically been bigger military spenders.<\/p>\n By contrast, the Netherlands had a debt to GDP ratio of 43.3% at the end of 2024, while for Germany the ratio was 62.5%. Zandee expects Germany under new Chancellor Friedrich Merz will agree to the 3.5% target, the British as loyal allies will commit despite \u201cmajor financial problems,\u201d while the Netherlands will ultimately also go along.<\/p>\n \u201cThe problem mainly starts in Belgium and then further south,\u201d Zandee said. \u201cThe French will simply take the budgetary risk, because they are not going to back down. But the Italians and the Spanish in particular will have to perform some fancy maneuvering.\u201d<\/p>\n Some countries are already well on their way to meeting the NATO target. Estonia announced in April that it would increase defense spending<\/a> to 5.4% of GDP already in 2026 and through to 2029, for an additional \u20ac2.8 billion of additional budget over four years, with the government saying spending would take into account the NATO capability targets.<\/p>\n