“If they don’t pay,” President Donald Trump warned of NATO allies, “I’m not going to defend them.” Currently, his official position is that the United States would reconsider its defense commitments if its allies fail to demonstrate resolve, pointing to the most visible benchmark of burden-sharing: the requirement for NATO members to spend 2 percent of their GDP on defense.
The 2 percent figure has been an informal guideline since 2006, but it gained more political urgency following the 2014 Russian invasion of Crimea. At the 2014 Wales NATO summit, heads of state pledged to reach the informal spending target within a decade. Former president Barack Obama even warned that the United Kingdom’s special relationship with the United States was at risk. Despite rising pressure from the United States, only six nations met the target by 2021. It was not until Russia’s full-scale invasion of Ukraine in 2022 that defense was finally perceived as an existential concern. In 2025, all NATO member states except Finland (the alliance’s newest member) met the 2 percent target and even committed to raising the target to 5 percent.
While these numbers seem great on paper, they obscure a pressing issue: Targets push members to spend more but not to spend better. There are few mechanisms in place to ensure that investments serve the alliance as a whole. Despite the alliance collectively identifying Russia as their most “significant and direct threat,” member nations optimize their militaries to address what they believe is their most pressing threat. Therefore, given their occasionally divergent domestic priorities, this means they are not all preparing for the same conflict. What NATO needs is collective readiness rather than collective expenditure. The limitations of the spending target become clear upon further investigation. For example, Greece and Germany both spend slightly above the 2 percent target, yet Greece deploys nearly 5 times more soldiers per capita. Countries with similar spending percentages can produce vastly different militaries that provide different levels of utility to alliance-wide security.
What Greece and Germany’s spending in relation to GDP does not capture is the composition of spending—that is, how funds are allocated between equipment procurement, personnel, operations, and research and development. Each facet bolsters military strength differently. In an attempt to regulate this following the annexation of Crimea, NATO urged each nation to allocate at least 20 percent of military spending toward procuring and developing “major” equipment. The target was designed to incentivize countries to build quality militaries with modern equipment rather than simply expand their headcounts. Despite the formalized target, the actual amount of investment in modernizing campaigns differs between nations experiencing a genuine existential threat and those which feel that they are merely paying lip service to the United States. The quality and sheer quantity of a nation’s modernization efforts can show whether a nation is sustaining their existing forces or building new capability.
Take Lithuania and Belgium, for example. Informed by differing geopolitical precarities, the two NATO states represent polar extremes of the equipment target. Belgium only allocates 14.5 percent of its defense budget on major equipment—Lithuania spends above 45 percent.
Lithuania shares a border with Kaliningrad, a Russian exclave, and Belarus, a longtime Russian ally. Since Russia’s full-scale invasion of Ukraine, the Lithuanian government has justified its large spending increases by the “real, but not imminent” threat of Russian aggression against the nation. Specifically, Lithuania has recently purchased 100 CV90 Mark IV tracked infantry fighting vehicles, 44 Leopard 2A8 tanks, 30 CAESAR self-propelled howitzers, and eight HIMARS multiple rocket launcher systems. They are some of the most cutting-edge, modern models in the market. These purchases make a clear statement: Lithuania intends to make a Russian ground offensive as difficult as possible. Similarly, Finland, Latvia, and Poland have drastically increased gross military spending since 2022 and spend over 35 percent of military expenditures on major equipment.
Belgium is not, by any measure, an unwilling ally. It met the 2 percent spending target by increasing its deficit to double defense spending from 2014 to 2025. Still, 32.4 percent of its defense budget is reserved for personnel costs. Belgium and many other Western European nations facing a lower threat than their Eastern allies rely on professional volunteer armies instead of mandatory conscription. Because volunteer armies rely on free-market monetary incentives, personnel costs consume a large budget share regardless of force size. The aforementioned Lithuania and Finland have mandated compulsory service, enabling less spending on personnel and more on modernization. A primary determinant of military outlays is geography.
When low-threat countries like Belgium do invest in equipment, it is rarely for invasion deterrence. While Lithuania is focused on preventing invasion from Russia, Belgium is focused on nonexistential, multinational missions miles away from home soil. In 2025, Belgium acquired 11 new F-35 fighter jets (with the intent to procure more) and is anticipating the arrival of a third frigate. While a legitimate attempt at modernization, it is not optimized for the conflict that NATO has agreed is most imminent. The threat from Russia—whose navy is constrained by the country’s geography—is primarily land-based. The most effective form of defense, therefore, is ground forces, not significantly more expensive jets and ships. Belgium’s efforts do not align with the alliance’s most pressing threat. Belgium’s specific frigate was designed for naval blockades off the coast of Libya and counter-piracy near Somalia, not to deter Russia. Since Belgium does not share a border with Russia and therefore does not fear ground invasion, its spending reflects maritime and expeditionary priorities instead of front-line ones.
Nowhere are divergent national strategic priorities more apparent than in Greece, where focus is on countering the military advancements of fellow NATO member Turkey in the ongoing territorial dispute over Cyprus. Greece’s defense minister explicitly labeled Turkey, not Russia, as the nation’s “first and primary threat” when justifying increased defense spending. Modernization efforts—like procuring advanced frigates, F-35 jets, and a 3 billion euro multi-layered air defense and anti-drone system—are optimized for the geography of the Aegean and Eastern Mediterranean, not the plains near Russia. Despite the collective security guarantees assured by Article V of the North Atlantic Treaty, Greece and Lithuania are not preparing for the same war; they are naturally preparing against who they individually see as existential threats. As a consequence, Greece’s high spending does not actually improve alliance-wide security.
The result is that NATO spending is not optimized for the alliance as a whole. While NATO often operates as a united body in strategic planning, its collective thinking does not extend to spending breakdowns—which would constitute a politically unacceptable intrusion on national sovereignty. While NATO does have specific capability targets that focus on coordinating collective defense, they are largely classified and carry little political weight. There is little incentive for politicians to meet a target the public cannot see, as opposed to the clearly comprehensible GDP target.
Pushing every ally toward 5 percent targets will not guarantee a stronger alliance. Instead, this target encourages creative accounting, like classifying nonmilitary spending as security infrastructure. Moreover, some European nations will struggle to afford the target, which risks sacrificing economic growth and letting real military spending decline. A target that shrinks the economy is illogical: Less growth means less capacity to fund future defense.
As national interests continue to drift, there is a real risk the historic alliance fractures. Disputes over Greenland’s sovereignty, Hungary’s relationship with Russia, and US involvement in Iran show that NATO is not currently a united body. Effective consensus decision-making demands that NATO be united; for collective security to be a true guarantee, each member state must be able to trust that the burden-sharing system will create cohesive military readiness.
NATO targets should be focused on what the alliance needs to effectively defend against: alliance-wide threats. Budgeting should be guided by military goals rather than political motives. NATO’s biggest free rider is not the member with the lowest GDP spending percentage—it is the member whose military strategy provides the least to the alliance as a whole.