Russia’s invasion of Ukraine has been met with international condemnation. NATO members have said they will increase defence spending in the face of what NATO Secretary General, Jens Stoltenberg, has described as “the most serious security crisis in a generation”.

Article 5: Collective defence

NATO was formed in 1949 with the signing of the North Atlantic Treaty in Washington. Its purpose was to ensure the collective security of its member states and to counter the perceived security threat from the then Soviet Union.

At the heart of the North Atlantic Treaty is Article 5, which states that an attack against one member state shall be considered as an attack against them all.

Article 5 does not necessarily commit an ally to military action in the event of an attack. Instead, it requires members to assist the party or parties attacked with “such action it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area”.

Given Article 5’s obligation, member states are advised to maintain adequate defence spending levels, so they have the capacity to act if necessary. This sentiment is formally reflected in the target for NATO members to spend at least 2% of their country’s GDP on defence, set at the 2006 Riga Summit.

A map showing NATO enlargement in Europe. Most western European countries joined between 1949 and 1955, while most eastern European countries joined between 1999 and 2009.

NATO defence spending since 2014

Despite all NATO members agreeing to the 2% guideline, few countries have adhered to it.

Russia’s annexation of Crimea in 2014 drew attention to the declining defence budgets of most NATO members. At the NATO Summit in Wales that year, member states agreed to reverse the trend and aim to spend 2% of GDP on defence by 2024.

Between 2014 and 2022, defence expenditure by NATO members is expected to rise by $140 billion (15%). However, while the number of countries meeting the 2% target has increased over this period, most are still falling short.

Two charts. The first shows trends in NATO defence expenditure between 2014 and 2022. Spending has increased in each year since 2017. The second chart shows that an increasing number of NATO allies have met the 2% spending target since the start of the Ukraine crisis in 2014. In 2020, ten members met the target, in 2021, eight did and in 2022, nine did. Figures for 2021 and 2022 are estimates.
Source: NATO, Defence Expenditures of NATO Countries (2014-2022)

As shown in the chart below, only nine out of 30 member states are expected to meet the 2% spending target in 2022, up from three members in 2014.

This chart compares defence spending as a share of GDP for each NATO country in 2014 and 2022. It shows that Greece spent the highest percentage of GDP in 2022, followed by the United States.
Note: Montenegro joined NATO in 2017, and North Macedonia in 2020. The chart does not include Finland or Sweden, which are currently in the process of joining NATO.
Source: NATO, Defence Expenditures of NATO Countries (2014-2022)

Greece, Lithuania, Latvia and the Slovak Republic had the largest increase in defence spending as a proportion of GDP between 2014 and 2022.

All member states have increased defence expenditure as a share of GDP over this period, except for Turkey and the US. The UK and Norway spent the same proportion of GDP on defence in 2014 and in 2022.

Spending pledges since Russia’s invasion of Ukraine

Although Ukraine is not a NATO member, meaning NATO countries are under no obligation to act in its defence, the UK and other allies have worked on security cooperation initiatives with Ukraine since its independence in 1991.

In response to Russia’s annexation of Crimea, the crisis in eastern Ukraine since, and at the request of the Ukrainian Government, allies have significantly stepped up their support.

At an extraordinary summit in Brussels in March 2022, NATO members agreed to “accelerate our efforts to fulfil our commitment to the Defence Investment Pledge in its entirety”. The pledge is a reference to the commitments made in 2014.

According to NATO, since the invasion, most member states have committed to investing more in defence, and more quickly. The table below shows future spending pledges made in response to Russia’s invasion of Ukraine.

Note: Countries with a “-” in the pledge year column have not publicly stated when they intend to meet their pledge.
Source: Jane’s Defence Weekly, Budget bulge: NATO increases armed forces Spending, April 2022; Office for Budget Responsibility, Fiscal Risks and Responsibility, July 2022; Euronews, How European countries stand on 2% of GDP defence spending, July 2022; Reuters, Denmark to boost defence spending and phase of Russian gas, March 2022; Republic of Estonia, Defence Budget, July 2022; Luxembourg Times, Luxembourg to double defence spending by 2028, June 2022
Country Defence spending pledge Projected year of fulfilment
Belgium Increase spending to 1.5% of GDP 2030
Czech Republic Increase spending to 2% of GDP 2025
Denmark Increase spending to 2% of GDP 2033
Estonia Increase spending to over 2.5% of GDP 2022
Finland Increase spending (which is currently at around 2% of GDP) by EUR2.2 billion over four years 2026
Germany Increase spending to over 2% of GDP –
Hungary Increase spending to 2% of GDP 2024
Italy Increase spending to 2% of GDP 2028
Latvia Increase spending to 2.5% of GDP 2025
Lithuania Increase spending to 2.52% of GDP 2022
Luxembourg Increase spending to 1% of GDP 2028
Netherlands Increase spending to 2% of GDP 2025
North Macedonia Increase spending to 2% of GDP 2024
Norway Increase spending by 3 billion Norwegian Krone (around 0.1% of GDP) for this year 2022
Poland Increase spending to 3% of GDP 2023
Romania Increase spending to 2.5% of GDP 2023
Slovak Republic Increase spending to 2% of GDP Achieved target in 2022
Slovenia Increase spending to 2% of GDP 2030
Spain Increase spending to 2% of GDP –
Sweden Increase spending to 2% of GDP –

While some countries have committed to maintaining these higher levels of spending in the long-term, others have only committed to boost spending for a fixed period.

Countries with notable spending pledges

Germany

Following the invasion, Germany set out plans to boost defence spending to over 2% of GDP through a EUR100 billion (£85 billion) special fund for military equipment modernisation, to be spent over several years. Germany has never met the 2% target, and until recent events it had not been expected to by the 2024 deadline.

Germany is currently the third largest contributor to NATO, after the US and the UK. If Germany was to spend 2% of GDP on defence, this would exceed current UK defence expenditure in absolute terms. According to the Office for Budget Responsibility, unless the UK increases defence spending to more than 2.5% of its GDP, this would mean Germany would overtake the UK as NATO’s second largest defence spender.

Poland

Poland is a former Soviet bloc country and is geographically close to Russia. Arguably, Poland’s history and geographic placement make Russia a particular security concern for Poland.

Poland was one of the few countries already spending 2% of GDP on defence before Russia’s invasion of Ukraine. Shortly after the invasion, it pledged to increase spending to 3% of GDP by 2023 and has passed legislation to ensure this commitment is met through its Homeland Defence Act.

What does the UK spend on defence?

Prior to Russia’s invasion, the UK was already meeting the 2% spending target. In 2022 it is expected to spend 2.1% of GDP on defence. This is down from 2.3% in 2020.

After the invasion, on 30 June 2022, Prime Minister Boris Johnson announced that defence spending would rise to 2.5% of GDP by the end of the decade.

The following week, when asked whether he was committing to this increase, the Prime Minister said this was more of a “prediction” based on current defence spending trends. He cautioned that “much depends on the size of our GDP” at the end of the decade.

No further action has been taken to increase the UK’s defence spending to 2.5% since the statement.

Further reading

Correction

On 16.11.22 we corrected this Insight, which originally said Poland was a former Member of the Soviet Union, to more accurately describe it as a former Soviet bloc country.

About the authors: Sanjana Balakrishnan is completing an internship with the House of Commons Library. Esme Kirk-Wade is a statistics researcher, specialising in defence.

Image: NATO logo flags in front of the headquarters building in Brussels, by Dragoș Asaftei – stock.adobe.com: 495384264 (Extended license)

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