With Donald Trump’s re-election, world leaders, analysts and citizens are once again attempting to predict - if possible - his next moves. However, one proposal stands out for its consistency - and, thus, for the nervousness it has sparked among NATO members, but mostly the European Union (EU): the push for all member states to allocate 5% of their GDP to defence spending. This concern was further reinforced by NATO Secretary General Mark Rutte, who confirmed this statement.

As Trump’s return reshapes global geopolitics, the question over defence spending remains central to the EU’s internal harmony and strategic viability. According to the latest figures from the Defence Expenditure of NATO Countries (2014-2024) report, disproportions in military expenses among member states are evident. Poland leads at 4.12% of GDP allocated to defence, followed by Estonia (3.43%), the United States (3.38%), and Greece (3.21%). These numbers can be examined in many ways. While high spenders signal their strong commitment to NATO, they also highlight the diverse national priorities influencing military funds and raise questions about the broader drives behind increased military expenditures.

Greece and Turkey (2.07%) serve as main examples of how regional dynamics shape military investments. Their historical tensions drive strategic decisions that extend beyond collective security, often requiring extensive budgetary vows. High defence costs, while strengthening NATO commitments, also place significant financial strain on national budgets, diverting resources from social and economic priorities. This dynamic raises concerns about whether such spending eventually benefits national security or primarily serves the interests of the defence industry, which profits from continued and increasing military expenses.

This dynamic, in turn, subtly underlines the means the United States benefits from NATO’s structure. The United States, while encouraging for burden-sharing, remains a leading supplier of military equipment, guaranteeing that increased spending ultimately benefits its defence area. While the proposal for a 5% threshold is framed as a move toward greater security, it also reinforces U.S. economic and strategic advantages within NATO. Finally, this pattern emphasises the delicate balance between defence essentials and economic priorities within the alliance.

A key matter of Trump’s 5% proposal lies in its potential to create instability within the European Union. A sharp increase in defence spending requirements could fast-track the emergence of a two-or even multi-tier Europe, where some nations manage to meet the target while others lag behind, deepening internal divisions and economic inequalities. This fragmentation would unavoidably spill over into NATO, consequently undermining the unity essential for its strategic effectiveness. Enforcing such a requirement risks further alienating nations with weaker economies, worsening domestic political divisions, and fostering anger among populations that may not perceive an immediate military threat necessitating such expenditures. Even major economies like Germany and France, which are only just meeting the current threshold, would face significant internal political challenges. Such a demand could increase social splits and result in a political climate where populist and extreme-right movements gain traction, fuelled by narratives of economic hardship and apparent external impositions.

The recent London Summit highlighted the shifting power dynamics within NATO and Europe’s increasing responsibility for its own defence.

Starmer described Europe as being “at a crossroads in history,” stressing the need for decisive action. The UK, France mostly, and other European powers agreed to work on a peace plan with Ukraine, with the aim of securing U.S. backing. While Europe will do the main plan in ensuring security, Starmer made it clear that U.S. support remains vital. He denied that the U.S. was an “unreliable” ally, stating that his discussions with Trump confirmed a shared commitment to “a durable peace.”

During the summit, NATO Secretary General Mark Rutte welcomed the promise by several European countries to increase defence spending, calling it “very good news.” However, he stopped short of specifying which nations would step up their contributions or how this would align with Trump’s proposed 5% threshold.

Rutte restated NATO’s long-standing call for a “fair balance” in defence spending, emphasising that European nations must take on more responsibility rather than relying on the U.S. to guarantee their security. His remarks suggest that while Trump’s proposal is pushing the debate forward, NATO itself is seeking a more pragmatic tactic - one that prioritises collective security without deepening economic divisions within the alliance.

The proposal to exclude military budgets from the Stability and Growth Pact has been suggested as a way to allow EU nations to increase defence spending without breaching financial rules. However, this approach does not necessarily solve the fundamental problem. While it could provide temporary relief for countries struggling to meet the 5% target, it does not address broader economic inequalities within the EU. Furthermore, such exemptions could weaken fiscal discipline, worsening economic inequalities and increasing public scepticism toward defence policies.

The rise of populist movements across Europe adds another layer of complexity. Many of these movements have pro-Russian leanings and could use increased defence budgets as a rallying cry against political elites. If governments fail to justify higher military expenditures to their populations, they risk fuelling internal referendums or protests, undermining both national cohesion and NATO’s broader strategic objectives.

While Trump’s 5% NATO proposal aims to strengthen NATO’s joint security, it also risks aggravating economic divisions within Europe, fuelling populist movements, and reinforcing U.S. dominance in transatlantic defence. The London Summit has demonstrated Europe’s growing determination to play a more independent role in security affairs, but questions remain as to whether the continent can act decisively. NATO’s leadership, represented by Mark Rutte, appears to be pushing for a more balanced approach, one that prioritizes strategic planning over arbitrary spending targets. The broader debate over defence spending will ultimately shape not only NATO’s future but also the stability of the EU and the transatlantic alliance as a whole.