NATO allies hit 4% defense spending target, setting stage for 5% goal

European and Canadian defense budgets have reached the 4% of GDP threshold, accelerating the alliance's trajectory toward the 5% target agreed at the Hague Summit.

By Handelsavisen Newsroom · Automated 2026-07-06 16:10 UTC · 1 min read

NATO Secretary General Mark Rutte confirmed that European allies and Canada have collectively increased their core defense expenditures to nearly 4% of GDP, a significant milestone in the alliance's post-Hague Summit restructuring.

The spending surge, which represents a nearly 20% year-over-year increase, signals that member states are moving faster than anticipated to meet their enhanced security commitments.

The achievement of the 4% benchmark is a critical intermediate step toward the alliance's more ambitious goal of raising defense spending to 5% of GDP by 2035.

The achievement of the 4% benchmark is a critical intermediate step toward the alliance's more ambitious goal of raising defense spending to 5% of GDP by 2035.

This target was established at last year's Hague Summit, where leaders acknowledged the need for a fundamental shift in burden-sharing to ensure long-term strategic autonomy and deterrence capabilities.

Rutte's comments suggest that the political will to fund this transition is translating into tangible budgetary allocations.

For markets, the sustained increase in defense spending reinforces the long-term growth outlook for the European defense sector.