---
title: "NATO's 2% Rule: Who Is (and Isn't) Paying Their Way"
description: "By any measure, it is the world's most powerful military alliance: a bloc of 31 countries united by a common defense clause stating that an attack on one is an attack on all. Yet the past few weeks have suggested that all is not well inside the NATO club. Rather than standing united, alliance members are becoming increasingly riven by internal squabbles—and the biggest of them all is the argument over who is, and isn't, hitting their spending targets.\n\nFormalized in 2014 and strengthened in 2023, NATO's guidelines dictate that all members should spend two percent of their GDP on defense. While not legally enforceable, a rift is nonetheless growing between those who hit this limit and those countries that fall well short of it. That rift exploded into the open with Donald Trump's recent comments about not defending allies who fail to reach the spending threshold.\n\nThis is a good moment, then, to dive into the nitty-gritty of all of it—to figure out which countries are paying their way, and which are the freeriders. The answers are probably not what most observers would expect. Stereotypes about who carries the alliance and who coasts on its protection are fast going out of date, and the politics underneath the headline number are far more tangled than the slogans suggest.\n\n## Key Takeaways\n\n- NATO's 2% of GDP defense target is a guideline, not a legal obligation; members who miss it are not in breach of any contract, and the money is not paid into any central NATO fund or owed to the United States.\n- NATO had no spending guidelines for its first quarter-century; the 2% concept emerged at the 2002 Prague summit and was only formalized as a ten-year goal in 2014, after Russia annexed Crimea.\n- Proximity to Russia is the single strongest predictor of high spending: nearly every state bordering Russia or Belarus pays well above 2%, with the Baltic states and Poland leading the alliance.\n- Poland is NATO's highest spender as a share of GDP, spending 3.9% in 2023 and on course to cross 4% in 2024, ahead even of the United States.\n- Germany, long the alliance's symbolic laggard, was set to reach the 2% target in 2024 for the first time—part of a two-year transformation in its relationship with its military.\n- Eighteen NATO members were due to hit the target in 2024, up from eleven the year before; persistent freeriders include Belgium, Spain, Italy, and Canada.\n\n## A Target That Took Decades to Arrive\n\nGiven its overwhelming prominence today, it can be strange to discover that NATO originally had no spending guidelines at all. Founded in 1949 by ten European countries plus the United States and Canada to combat the growing threat of the Soviet Union, NATO spent its first quarter of a century not even bothering to track members' defense spending. It was only in 1974 that anyone in the alliance suggested keeping an eye on the figures—and even then, the idea of a formal spending target was nowhere on the horizon.\n\nIn fact, it would not be until long after the Cold War was over that the bloc finally decided to broach the idea of budgets. The year was 2002, and the location was Prague. That November, heads of the alliance agreed to set a budgetary benchmark. According to CBC, the Bush White House had originally pushed for the target to be mandatory, only to later drop the idea. It was from this meeting that the concept of spending two percent of GDP first emerged—but it would not become anything close to official until 2014.\n\nThat is because 2014 was the year everything changed for European security. In the east, Russia annexed Crimea and fomented war in Ukraine's Donbas region. In the south, near NATO member Turkey, a brutal caliphate arose from the ashes of Iraq and Syria. With the geopolitical temperature rising, the 28 then-members all agreed to raise defense spending to two percent of GDP, and were given a ten-year timeframe to get there. Fast forward to 2024, and not everyone has made it—even as the threats from Russia and China grow, some members are still spending well below the threshold.\n\n## Two Things Everyone Gets Wrong\n\nBefore naming and shaming anyone, two persistent misunderstandings need clearing up, because the mainstream coverage of this issue has, frankly, been abysmal. The first concerns who actually counts as a member of NATO.\n\nAmerican media often refers simply to \"Europeans\" when discussing the alliance, but five EU states sit outside NATO entirely. One of them, Sweden, is in the process of joining; the others—Ireland, Austria, Malta, and Cyprus—have no plans to enter. Meanwhile, six European NATO members are not in the EU at all: the UK, Norway, Iceland, Montenegro, North Macedonia, and Albania. And three members of the NATO family are not European in the slightest: the United States, Canada, and Turkey. Altogether that adds up to 31 member states, or 32 once Sweden finally joins—all treaty-bound to assist one another in the event of an attack, a provision that has only ever been activated once, by the United States in the immediate aftermath of 9/11.\n\nThe second misunderstanding is more important. While NATO members are bound to defend one another, they are not treaty-bound to spend two percent of GDP on defense. As defense analyst Ulrike Franke has put it, \"It is simply not true that NATO members not reaching it are in any kind of breach of contract.\" Nor does the money go into some kind of NATO pot. As journalist Matthew Yglesias has lamented, \"I wish reporting on this would indicate to people that there is no NATO fund that these countries are in arrears to.\" The 2% figure is what alliance members are supposed to spend on their own militaries and research and development, to ensure that collective defense works as a serious deterrent—not a fee, and not a debt owed to Washington.\n\n## The Enemies Are Spending More\n\nThat second point matters all the more given what is happening with NATO's adversaries. None of this is letting the laggards off the hook. As NATO Secretary General Jens Stoltenberg said in February 2026, \"Europeans and Canada have to spend more, because we haven't seen fair burden sharing in the alliance.\"\n\nThe reason for the urgency is straightforward. As it shifts to a war economy, Russia is now spending a full six percent of its GDP on defense—equivalent to about forty percent of the overall state budget. That is the highest in modern history. And Moscow is not alone. While Beijing officially spends only a little over one percent of GDP on its armed forces, the real figure is thought to be significantly higher. Against that backdrop, the question of who among NATO's 31 members is genuinely pulling their weight—and who is letting everyone else down—becomes a matter of collective survival rather than accounting.\n\n## Why the Headline Number Misleads\n\nOne reason NATO heads like to talk about \"burden sharing\" is the wildly different size of member economies. Hence the two-percent-of-GDP framing: it is a target any nation can aspire to, regardless of wealth. Yet this sometimes obscures massive differences in what each country actually contributes.\n\nSpeaking to PolitiFact, Justin Logan of the Cato Institute pointed out that two percent of the German economy is more than double the entire Estonian economy. These sorts of differences are why some critics complain that the US makes up nearly seventy percent of all NATO spending. It is not just that America spends an unusually high percentage of its GDP on defense; it is also that the American economy is simply so much bigger than that of any other NATO member.\n\nEven among economies that aren't quite so large, you see something similar. As Logan also highlights, \"France and Turkey, which don't meet the 2% standard, have far more firepower than most of those who meet the standard.\" Of course, asking every member of NATO to spend as much in raw dollars as France or Turkey—let alone America—would pretty quickly bankrupt all but the wealthiest. So spending a percentage is seen as fairer.\n\nBut even with that caveat, plenty of people still think the two-percent metric is a poor one. The Atlantic Council recently highlighted the example of Greece, \"whose ability to surpass the two per cent threshold ... was tied to its absence of economic growth.\" When a shrinking economy is the denominator, the ratio rises even if real spending stands still. Lacking a better metric, though, it is one the alliance has decided to roll with—even if the question of who is hitting it can be contentious.\n\n## Why the Counts Don't Agree\n\nIf you follow the news, you may have noticed different outlets giving different totals for how many NATO countries reach two percent. US News and World Report, for example, says it is only 11 countries out of 31—a mere 35%. Politico, on the other hand, claims the true figure is 18, or \"over half.\" What gives?\n\nFor this discrepancy, you can thank the existence of two different data sets: spending levels for 2023, and spending commitments made for 2024. For most of the last decade, a member state's spending level one year was a pretty good indicator of what it would be the next. But since Russia's unprovoked attack on Ukraine, European countries have been boosting spending so quickly that the figures no longer necessarily track.\n\nTurkey is the clearest illustration. It spent a mere 1.31% of GDP on defense last year, putting it fourth from bottom in NATO rankings. But its spending plans for 2024 will catapult that total beyond 4% of GDP—to an eye-watering $40.5 billion. To keep things simple, this analysis splits alliance members into three categories: those, like the United States, that regularly spend over two percent; those, like Belgium, that never do; and those, like Turkey, that were historic laggards but are due to cross the threshold in 2024. Starting at the top means starting with the country that spends the highest percentage of its GDP on defense—and it is not the United States. It is Poland.\n\n## Best in Class: Poland and the Baltic Front Line\n\nIn January 2023, WarFronts asked whether Poland was becoming Europe's next military superpower. Even then, it was obvious that Warsaw was embarking on a defense spending spree that would catapult it ahead of all peer nations—a military splurge far more significant than Germany's better-known Zeitenwende.\n\nA little over a year later, that call looks right. In 2023, NATO's second-highest military spender—the USA—spent 3.49% of its GDP on defense. Poland, by contrast, spent 3.9%. And 2024 will see that figure climb higher still. Like Turkey, Poland is expected to cross the four percent threshold this year, an increase that will translate into serious firepower. Already, Warsaw has 100 HIMARS rocket launchers in the pipeline, along with over 1,000 heavy tanks. With spending showing no signs of ramping down, security consultant Peer de Jong recently told Foreign Policy that \"Poland will clearly become Europe's largest conventional army.\"\n\nThe reasons for this rearmament are obvious. The oldest generation of Poles can still remember when the Red Army joined the Nazis to cleave their nation in two. Middle-aged people remember the Communist domination of their country from 1945 to 1989. And the youngest simply need to look across the border to Ukraine to see how history might repeat itself.\n\nIt is here that one of the paradoxes of Trump's recent remarks comes into focus. When the former—and perhaps future—president said of alliance members who don't pay their dues, \"I would encourage [Russia] to do whatever the hell they want (to them),\" he made it seem as if there are NATO countries close to Moscow that don't hit the two percent target. In truth, practically all nations sharing a border with Russia or Belarus pay significantly over two percent. The sole exception is Norway, which shares a short land border with Russia in its extreme north and spent just 1.67% of GDP on defense last year. Estonia, Finland, Latvia, Lithuania, and Poland, though, all pay their way. As Politico put it, \"There's a clear trend in NATO members' defense budgets: the closer to Russia, the higher the spending.\"\n\nThis is especially true among the Baltic states. Former members of the Soviet Union, they now lead the way in defense budgets. Tiny Estonia is the fourth-highest NATO spender—after Poland, the US, and Greece—spending 2.73% of GDP in 2023, a number due to rise to 3.2% in 2024. Lithuania, too, is trying to pull its weight. As its Minister for Foreign Affairs recently wrote, \"Lithuania's defense budget has grown 302% since 2014. That's a bigger increase than any other NATO member\"—an increase that has now taken it over 2.5% of GDP.\n\nAmong member states that don't border Russia or Belarus but do border the war zone in Ukraine, the numbers are slightly lower, but still well above the two percent threshold. Romania and Hungary both spend above 2.4%, while Slovakia spends more or less exactly two percent.\n\n## Britain and Greece: Far From the Front but Still Paying\n\nProximity to the Russia-Ukraine War is not the only deciding factor. Aside from the United States, two other nations far from the action have historically paid their dues: the UK and Greece.\n\nThe third-highest spender as a percentage of GDP, Greece has its own problems to worry about—the biggest of which is fellow NATO member Turkey, a neighbor with whom it has fought several wars and maintains an active dispute over Cyprus. High defense spending therefore makes as much sense for Athens as it does for Warsaw.\n\nThe United Kingdom is a special case. A one-time military superpower, it still likes to think of itself as a \"tier one\" power, a smaller version of the USA. Whether that is really the case is debatable, but what is not up for debate is Britain's defense spending. At 2.3 percent of GDP, that translates—in raw money—into the second-highest military spend in NATO. Globally, only five capitals spend more on defense in actual dollars than London.\n\nEurope as a whole also deserves a mention. As a bloc, the continent's NATO members spend exactly two percent of their collective GDP on defense. As Politico points out, that is a huge jump from the collective 1.49% Europe spent in 2014. But NATO isn't only a group endeavor. Just as there are individual capitals shouldering the military burden, there are others that have been slacking off for decades.\n\n## The Laggards Who Are Finally Turning the Ship\n\nAmong people who get worked up about Europe not paying enough for its own defense, one nation in particular acts as the continental boogeyman: Germany.\n\nGermany spent the decades after the Cold War playing the part of the ungrateful roommate who refuses to pay their fair share of the rent. Even after Chancellor Olaf Scholz announced a 100-billion-euro special fund for military modernization in the wake of Russia's invasion, defense spending remained weak. The 2023 figures show Berlin hit a mere 1.57% of GDP. For those sympathetic to Trump's comments, this is the textbook case of a nation not pulling its weight. After recently overtaking Japan, Germany is now the world's third-largest economy. If any capital could afford to spend more, it is surely Berlin.\n\nAll of which is why the recent news was so welcome. Shortly after Trump made his comments, German defense minister Boris Pistorius announced that Germany was allocating the equivalent of $76.8 billion for defense spending in 2024. In Pistorius's words, this means Berlin \"will reach the agreed 2% target this year.\" The announcement—on February 15—caps a two-year transformation of Germany's relationship with its military. From a mostly pacifist state haunted by its Nazi past, recent surveys by PwC show nearly 70 percent of Germans now support more defense spending.\n\nOn Ukraine, too, Germany has gone from being an unenthusiastic supporter to the third-largest overall contributor after the United States and the European Union. On the very day this analysis was prepared, Scholz announced a new support package for Ukraine worth $1.22 billion. This is what it means to say mainstream reporting has been abysmal: look at most American media, and Germany is still portrayed as it was in 2022—a dithering, low-spending laggard, rather than the military behemoth it is now trying to become.\n\nOf course, one shouldn't paint an overly rosy picture. The commissioner for Germany's armed forces, Eva Högl, has said the special 100-billion-euro fund needs to triple in size to bring Berlin's military up to scratch after decades of neglect. Still, 2024 appears to be the year Germany at last begins to take up its mantle as a defense leader in Europe.\n\n## France's Quiet Recovery\n\nNor is Germany the only laggard finally turning the ship around. There is also France. Although France gets a bad reputation in some media for not paying its dues, the reality is that Paris has always spent a significant amount on defense. At 1.9% of GDP, it was the highest-spending country in 2023 to not breach the 2% threshold.\n\nFrance is also one of Europe's only true military powers. The sole EU country with nuclear weapons, it projects strength around the world like no other NATO power except the US. To be fair to Paris, it is also implementing a plan that was supposed to haul it across the two percent limit by 2025. The word \"was\" is deliberate, because France actually wound up hitting the target early. With a 2024 budget of €47.2 billion, Armed Forces Minister Sébastien Lecornu was able to announce that Paris would cross the two percent threshold this year. And it is not stopping there. Under the seven-year military planning law, spending is due to rise to almost 70 billion euros in the coming years.\n\nAs with Germany, though, this silver lining comes with a dark cloud. After spending close to three percent of GDP on defense during the Cold War, Paris hugely scaled back after the financial crisis. Foreign Policy reports that, by 2015, \"the country was left with one-third of the troops, one-quarter of the artillery pieces, and one-tenth of the tanks.\" Even with accelerated spending now, it will take time to make up for such a gutting of the armed forces.\n\nBut, at least, things are moving in the right direction—and that is true of a surprising number of NATO countries. Turkey is another nation ramping up defense spending in 2024, in Ankara's case to an insane degree. While few others are aiming to go quite so fast, there are now seven former NATO laggards due to finally cross two percent this year. The Czech Republic, for instance, signed a law last summer committing the country to raise defense spending from 1.5% of GDP to two percent, starting this year. It will be joined by other countries like Bulgaria and Albania. Overall, eighteen NATO members will hit the target in 2024, up from eleven last year. Even some who don't quite make it won't be far behind: Norway recently committed to the two percent target, and while Oslo won't hit it in 2024, it should in 2025 or 2026.\n\nIn short, NATO countries as a whole are rising out of their slumber, with even many of the laggards now racing to get their acts together. But not all of them.\n\n## The Freeriders Who Refuse to Budge\n\nLook at any graph of NATO members' spending and you might notice something odd. Although there are 31 members, most datasets rank just thirty nations by spending. It is not because newest-member Finland hasn't had time to submit figures. Rather, it is because founding member Iceland is deliberately excluded. As a nation without any armed forces, Iceland effectively doesn't spend anything on defense. As a result, Reykjavik is normally considered a special case—one that shouldn't really be held to the two percent standard.\n\nNor is it the only one. Although it lies at the bottom of every ranking—spending just 0.72% of GDP—Luxembourg is widely agreed to be another special case. A country of just 640,000 people—of whom about 47% are foreigners with residency—and an army comprising just 900 personnel, Luxembourg is hard to judge by normal standards. On top of its diminutive size, Luxembourg's GDP per capita is so crazily high that it already spends one of the highest amounts per person on defense: $764 for every resident living in the country. Given all this, very few are willing to class either Iceland or Luxembourg as true freeriders—more micronations with their own weird dynamics that can't be judged by normal standards.\n\nNo, to locate the true freeriders, you need to look a little higher up the rankings—to the rich, normal-sized nations that nonetheless utterly rely on their neighbors for protection. In NATO circles, the most infamous of all is Belgium. At 1.13% of GDP, it spends the lowest amount of any nation not called Luxembourg or Iceland. This is particularly galling, since in 2014 Prime Minister Di Rupo promised to hit the two percent target by 2024. Now that it actually is 2024, Prime Minister De Croo is instead promising to hit it by 2035—at which point, the next PM will presumably push it back yet again. The Belgian position is presumably that the country is a long way from Russia and has France to rely on for protection. Still, its commitment to low defense spending is so total that the military analysis blog Oryx once declared, \"Belgium is often considered the black sheep of NATO.\"\n\nAnother rich country a long way from Russia that also spends painfully little is Spain. At 1.26%, it is only a little worse than another large European economy, Italy. And although Rome pledged to catch up with France and Britain, Defense Minister Guido Crosetto recently admitted the country would struggle to hit the two percent target even by 2028.\n\n## Canada: The Embarrassment Across the Ocean\n\nThe freeriders aren't all European, though. There is another country an entire ocean away that spends so little on defense the Economist recently characterized its position as \"increasingly embarrassing.\" That country is Canada.\n\nThe reason Ottawa doesn't need to splurge on defense is obvious. There is literally no universe in which Russia or China bombs Canada and big brother America doesn't come rushing to help. Even if the US pulled out of NATO, flipped Europe the bird, and declared itself \"isolationist forever,\" it is impossible to imagine Washington not having Ottawa's back. As a result, Canada today spends a measly 1.38% of GDP on defense, a figure so low that—if you discount Luxembourg—it sits among the bottom fifth in NATO.\n\nAnd unlike former laggards Germany and Turkey, Canada has no plans to significantly increase that spending. According to the Economist, \"Leaked Pentagon intelligence documents ... confirmed that Mr. Trudeau had told NATO allies not only that Canada would not reach the 2% commitment (in 2023) but that it 'never' would.\" Again, this makes financial sense from Canada's perspective. In the same way that Belgium can slack off because France will always defend it, Ottawa is content to rely on America.\n\nBut just because something is good financial sense doesn't mean it isn't foolish in other ways. The Economist points out that global warming is opening up Arctic shipping routes—routes contested by Russia and China, and uncomfortably close to Canada's far north. While the battlegrounds right now are eastern Europe and Taiwan, it may not be long before a greater geopolitical competition is taking place in the Arctic, one Canada would be dragged into whether Ottawa likes it or not. Given such an uncertain future, does it really make sense for Canada to be so utterly reliant on American largesse?\n\n## The Bottom Line on Burden Sharing\n\nAt the end of all that, the politics around the two percent rule turn out to be more complicated than most observers realize. Stereotypes about certain countries not paying their way—cough, Germany—are fast becoming outdated, unreflective of the new era of uncertainty most NATO members are living through.\n\nThat said, it is also clear that NATO's collective deterrence can only work if enough allies are willing to put the money in—to build militaries so robust that even the madman in the Kremlin will think twice about trying to move his borders westward. Because, scary as it is to say, NATO may not always be able to rely on America. As much as anyone might pray that's not the case, the only surefire way to hedge against that outcome is to do what 18 members are already doing: start building formidable deterrence. Deterrence that, hopefully, will ensure a costly NATO war with Russia never comes.\n\n## Frequently Asked Questions\n\n### Is the 2% target a legal obligation that members can be sued or penalized for missing?\n\nNo. While NATO members are treaty-bound to defend one another, they are not treaty-bound to spend two percent of GDP on defense. The figure is a guideline, not a legal duty, and as defense analyst Ulrike Franke noted, members who miss it are not in any kind of breach of contract.\n\n### Does the 2% money go into a NATO fund or get owed to the United States?\n\nNo. There is no central NATO pot that countries pay into, and missing the target does not mean owing America money. The 2% figure is what each member is supposed to spend on its own military and research and development, so that collective defense functions as a serious deterrent.\n\n### When did the 2% target actually originate?\n\nNATO had no spending guidelines for its first quarter-century after its 1949 founding. The concept of spending two percent of GDP first emerged at the November 2002 Prague summit, where the Bush White House had pushed — unsuccessfully — for it to be mandatory. It was only formalized as a ten-year goal in 2014, after Russia annexed Crimea.\n\n### Which NATO country spends the most as a share of GDP?\n\nPoland. In 2023 it spent 3.9% of GDP on defense, ahead of the United States' 3.49%, and it is expected to cross four percent in 2024. Warsaw has 100 HIMARS rocket launchers in the pipeline and over 1,000 heavy tanks, prompting predictions it will become Europe's largest conventional army.\n\n### Why is proximity to Russia such a strong predictor of high spending?\n\nStates closest to the threat spend the most. Practically every nation bordering Russia or Belarus — Estonia, Finland, Latvia, Lithuania, and Poland — pays significantly over two percent, with Norway the sole exception at 1.67%. As Politico put it, the closer to Russia, the higher the spending.\n\n## Related Coverage\n\n- [How Powerful Is Turkey? The Military and Geopolitical Rise](/articles/military/how-powerful-is-turkey-military-geopolitical-rise)\n- [Britain's Military Overhaul: Ambitious Plans, Uncertain Future](/articles/military/britains-military-overhaul-ambitious-plans-uncertain-future)\n- [Who Could Lead Europe to War](/articles/geopolitics/who-could-lead-europe-to-war)\n\n## Sources\n\n1. https://www.nato.int/cps/en/natohq/news_216897.htm\n2. https://www.cbc.ca/news/politics/nato-military-spending-canada-trudeau-1.6817309\n3. https://www.politico.eu/article/more-than-half-of-nato-countries-hit-defense-spending-target/\n4. https://www.washingtonpost.com/politics/2024/02/12/nato-countries-defense-spending-gdp-trump/\n5. https://www.politico.eu/article/russia-nato-spending-ukraine-war-donald-trump/\n6. https://foreignpolicy.com/2023/06/08/france-defense-budget-macron-ukraine-russia/\n7. https://breakingdefense.com/2023/02/estonia-urges-nato-allies-to-increase-defense-spending-closer-to-2-5-percent/\n8. https://news.err.ee/1609113089/estonia-s-defense-budget-to-reach-3-2-percent-of-gdp-in-2024\n9. https://www.defensenews.com/global/europe/2024/01/22/romanian-government-readies-fighting-vehicle-howitzer-deals-in-2024/\n10. https://apnews.com/article/greece-defense-military-turke-nato-f35-4f3d41c836ca15bbc985ef8dbad71611\n11. https://www.reuters.com/world/europe/germany-hits-2-nato-target-first-time-since-1992-reports-dpa-2024-02-14/\n12. https://www.rand.org/pubs/commentary/2024/01/germanys-new-plans-for-transforming-its-defence-and.html\n13. https://www.ifw-kiel.de/topics/war-against-ukraine/ukraine-support-tracker/\n14. https://www.politico.eu/article/france-will-reach-nato-defense-spending-target-in-2024/\n15. https://meta-defense.fr/en/2023/10/18/turkish_defense_budget_2024/\n16. https://carnegieendowment.org/politika/90753\n17. https://brnodaily.com/2023/06/09/news/politics/president-signs-bill-raising-czech-defence-spending-to-at-least-2-of-gdp/\n18. https://www.gov.bg/en/Press-center/News/Defense-spending-to-make-up-2-of-GDP-in-2024\n19. https://www.iiss.org/press/2024/02/the-military-balance-2024-press-release/\n20. https://www.euractiv.com/section/defence-and-security/news/luxembourg-strikes-special-deal-on-nato-defence-spending-target/\n21. https://www.oryxspioenkop.com/2023/09/shared-threats-unequal-efforts-belgiums.html\n22. https://www.reuters.com/world/europe/italy-struggle-meet-nato-2-defence-spending-target-minister-2023-11-07/\n23. https://www.economist.com/the-americas/2023/07/24/canadas-miserly-defence-spending-is-increasingly-embarrassing\n24. https://twitter.com/GLandsbergis/status/1757859674559332707\n25. https://twitter.com/mattyglesias/status/1756518266581717482\n26. https://twitter.com/RikeFranke/status/996701442911211520\n27. https://www.politifact.com/article/2024/feb/14/fact-check-trump-misleads-in-comments-that-he-got/\n\n<!-- youtube:uuca3VjSwmg -->"
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By any measure, it is the world's most powerful military alliance: a bloc of 31 countries united by a common defense clause stating that an attack on one is an attack on all. Yet the past few weeks have suggested that all is not well inside the NATO club. Rather than standing united, alliance members are becoming increasingly riven by internal squabbles—and the biggest of them all is the argument over who is, and isn't, hitting their spending targets.

Formalized in 2014 and strengthened in 2023, NATO's guidelines dictate that all members should spend two percent of their GDP on defense. While not legally enforceable, a rift is nonetheless growing between those who hit this limit and those countries that fall well short of it. That rift exploded into the open with Donald Trump's recent comments about not defending allies who fail to reach the spending threshold.

This is a good moment, then, to dive into the nitty-gritty of all of it—to figure out which countries are paying their way, and which are the freeriders. The answers are probably not what most observers would expect. Stereotypes about who carries the alliance and who coasts on its protection are fast going out of date, and the politics underneath the headline number are far more tangled than the slogans suggest.

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## Key Takeaways

- NATO's 2% of GDP defense target is a guideline, not a legal obligation; members who miss it are not in breach of any contract, and the money is not paid into any central NATO fund or owed to the United States.
- NATO had no spending guidelines for its first quarter-century; the 2% concept emerged at the 2002 Prague summit and was only formalized as a ten-year goal in 2014, after Russia annexed Crimea.
- Proximity to Russia is the single strongest predictor of high spending: nearly every state bordering Russia or Belarus pays well above 2%, with the Baltic states and Poland leading the alliance.
- Poland is NATO's highest spender as a share of GDP, spending 3.9% in 2023 and on course to cross 4% in 2024, ahead even of the United States.
- Germany, long the alliance's symbolic laggard, was set to reach the 2% target in 2024 for the first time—part of a two-year transformation in its relationship with its military.
- Eighteen NATO members were due to hit the target in 2024, up from eleven the year before; persistent freeriders include Belgium, Spain, Italy, and Canada.

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<!-- aeo:section start="a-target-that-took-decades-to-arrive" -->
## A Target That Took Decades to Arrive

Given its overwhelming prominence today, it can be strange to discover that NATO originally had no spending guidelines at all. Founded in 1949 by ten European countries plus the United States and Canada to combat the growing threat of the Soviet Union, NATO spent its first quarter of a century not even bothering to track members' defense spending. It was only in 1974 that anyone in the alliance suggested keeping an eye on the figures—and even then, the idea of a formal spending target was nowhere on the horizon.

In fact, it would not be until long after the Cold War was over that the bloc finally decided to broach the idea of budgets. The year was 2002, and the location was Prague. That November, heads of the alliance agreed to set a budgetary benchmark. According to CBC, the Bush White House had originally pushed for the target to be mandatory, only to later drop the idea. It was from this meeting that the concept of spending two percent of GDP first emerged—but it would not become anything close to official until 2014.

That is because 2014 was the year everything changed for European security. In the east, Russia annexed Crimea and fomented war in Ukraine's Donbas region. In the south, near NATO member Turkey, a brutal caliphate arose from the ashes of Iraq and Syria. With the geopolitical temperature rising, the 28 then-members all agreed to raise defense spending to two percent of GDP, and were given a ten-year timeframe to get there. Fast forward to 2024, and not everyone has made it—even as the threats from Russia and China grow, some members are still spending well below the threshold.

<!-- aeo:section end="a-target-that-took-decades-to-arrive" -->
<!-- aeo:section start="two-things-everyone-gets-wrong" -->
## Two Things Everyone Gets Wrong

Before naming and shaming anyone, two persistent misunderstandings need clearing up, because the mainstream coverage of this issue has, frankly, been abysmal. The first concerns who actually counts as a member of NATO.

American media often refers simply to "Europeans" when discussing the alliance, but five EU states sit outside NATO entirely. One of them, Sweden, is in the process of joining; the others—Ireland, Austria, Malta, and Cyprus—have no plans to enter. Meanwhile, six European NATO members are not in the EU at all: the UK, Norway, Iceland, Montenegro, North Macedonia, and Albania. And three members of the NATO family are not European in the slightest: the United States, Canada, and Turkey. Altogether that adds up to 31 member states, or 32 once Sweden finally joins—all treaty-bound to assist one another in the event of an attack, a provision that has only ever been activated once, by the United States in the immediate aftermath of 9/11.

The second misunderstanding is more important. While NATO members are bound to defend one another, they are not treaty-bound to spend two percent of GDP on defense. As defense analyst Ulrike Franke has put it, "It is simply not true that NATO members not reaching it are in any kind of breach of contract." Nor does the money go into some kind of NATO pot. As journalist Matthew Yglesias has lamented, "I wish reporting on this would indicate to people that there is no NATO fund that these countries are in arrears to." The 2% figure is what alliance members are supposed to spend on their own militaries and research and development, to ensure that collective defense works as a serious deterrent—not a fee, and not a debt owed to Washington.

<!-- aeo:section end="two-things-everyone-gets-wrong" -->
<!-- aeo:section start="the-enemies-are-spending-more" -->
## The Enemies Are Spending More

That second point matters all the more given what is happening with NATO's adversaries. None of this is letting the laggards off the hook. As NATO Secretary General Jens Stoltenberg said in February 2026, "Europeans and Canada have to spend more, because we haven't seen fair burden sharing in the alliance."

The reason for the urgency is straightforward. As it shifts to a war economy, Russia is now spending a full six percent of its GDP on defense—equivalent to about forty percent of the overall state budget. That is the highest in modern history. And Moscow is not alone. While Beijing officially spends only a little over one percent of GDP on its armed forces, the real figure is thought to be significantly higher. Against that backdrop, the question of who among NATO's 31 members is genuinely pulling their weight—and who is letting everyone else down—becomes a matter of collective survival rather than accounting.

<!-- aeo:section end="the-enemies-are-spending-more" -->
<!-- aeo:section start="why-the-headline-number-misleads" -->
## Why the Headline Number Misleads

One reason NATO heads like to talk about "burden sharing" is the wildly different size of member economies. Hence the two-percent-of-GDP framing: it is a target any nation can aspire to, regardless of wealth. Yet this sometimes obscures massive differences in what each country actually contributes.

Speaking to PolitiFact, Justin Logan of the Cato Institute pointed out that two percent of the German economy is more than double the entire Estonian economy. These sorts of differences are why some critics complain that the US makes up nearly seventy percent of all NATO spending. It is not just that America spends an unusually high percentage of its GDP on defense; it is also that the American economy is simply so much bigger than that of any other NATO member.

Even among economies that aren't quite so large, you see something similar. As Logan also highlights, "France and Turkey, which don't meet the 2% standard, have far more firepower than most of those who meet the standard." Of course, asking every member of NATO to spend as much in raw dollars as France or Turkey—let alone America—would pretty quickly bankrupt all but the wealthiest. So spending a percentage is seen as fairer.

But even with that caveat, plenty of people still think the two-percent metric is a poor one. The Atlantic Council recently highlighted the example of Greece, "whose ability to surpass the two per cent threshold ... was tied to its absence of economic growth." When a shrinking economy is the denominator, the ratio rises even if real spending stands still. Lacking a better metric, though, it is one the alliance has decided to roll with—even if the question of who is hitting it can be contentious.

<!-- aeo:section end="why-the-headline-number-misleads" -->
<!-- aeo:section start="why-the-counts-don-t-agree" -->
## Why the Counts Don't Agree

If you follow the news, you may have noticed different outlets giving different totals for how many NATO countries reach two percent. US News and World Report, for example, says it is only 11 countries out of 31—a mere 35%. Politico, on the other hand, claims the true figure is 18, or "over half." What gives?

For this discrepancy, you can thank the existence of two different data sets: spending levels for 2023, and spending commitments made for 2024. For most of the last decade, a member state's spending level one year was a pretty good indicator of what it would be the next. But since Russia's unprovoked attack on Ukraine, European countries have been boosting spending so quickly that the figures no longer necessarily track.

Turkey is the clearest illustration. It spent a mere 1.31% of GDP on defense last year, putting it fourth from bottom in NATO rankings. But its spending plans for 2024 will catapult that total beyond 4% of GDP—to an eye-watering $40.5 billion. To keep things simple, this analysis splits alliance members into three categories: those, like the United States, that regularly spend over two percent; those, like Belgium, that never do; and those, like Turkey, that were historic laggards but are due to cross the threshold in 2024. Starting at the top means starting with the country that spends the highest percentage of its GDP on defense—and it is not the United States. It is Poland.

<!-- aeo:section end="why-the-counts-don-t-agree" -->
<!-- aeo:section start="best-in-class-poland-and-the-baltic-front-line" -->
## Best in Class: Poland and the Baltic Front Line

In January 2023, WarFronts asked whether Poland was becoming Europe's next military superpower. Even then, it was obvious that Warsaw was embarking on a defense spending spree that would catapult it ahead of all peer nations—a military splurge far more significant than Germany's better-known Zeitenwende.

A little over a year later, that call looks right. In 2023, NATO's second-highest military spender—the USA—spent 3.49% of its GDP on defense. Poland, by contrast, spent 3.9%. And 2024 will see that figure climb higher still. Like Turkey, Poland is expected to cross the four percent threshold this year, an increase that will translate into serious firepower. Already, Warsaw has 100 HIMARS rocket launchers in the pipeline, along with over 1,000 heavy tanks. With spending showing no signs of ramping down, security consultant Peer de Jong recently told Foreign Policy that "Poland will clearly become Europe's largest conventional army."

The reasons for this rearmament are obvious. The oldest generation of Poles can still remember when the Red Army joined the Nazis to cleave their nation in two. Middle-aged people remember the Communist domination of their country from 1945 to 1989. And the youngest simply need to look across the border to Ukraine to see how history might repeat itself.

It is here that one of the paradoxes of Trump's recent remarks comes into focus. When the former—and perhaps future—president said of alliance members who don't pay their dues, "I would encourage [Russia] to do whatever the hell they want (to them)," he made it seem as if there are NATO countries close to Moscow that don't hit the two percent target. In truth, practically all nations sharing a border with Russia or Belarus pay significantly over two percent. The sole exception is Norway, which shares a short land border with Russia in its extreme north and spent just 1.67% of GDP on defense last year. Estonia, Finland, Latvia, Lithuania, and Poland, though, all pay their way. As Politico put it, "There's a clear trend in NATO members' defense budgets: the closer to Russia, the higher the spending."

This is especially true among the Baltic states. Former members of the Soviet Union, they now lead the way in defense budgets. Tiny Estonia is the fourth-highest NATO spender—after Poland, the US, and Greece—spending 2.73% of GDP in 2023, a number due to rise to 3.2% in 2024. Lithuania, too, is trying to pull its weight. As its Minister for Foreign Affairs recently wrote, "Lithuania's defense budget has grown 302% since 2014. That's a bigger increase than any other NATO member"—an increase that has now taken it over 2.5% of GDP.

Among member states that don't border Russia or Belarus but do border the war zone in Ukraine, the numbers are slightly lower, but still well above the two percent threshold. Romania and Hungary both spend above 2.4%, while Slovakia spends more or less exactly two percent.

<!-- aeo:section end="best-in-class-poland-and-the-baltic-front-line" -->
<!-- aeo:section start="britain-and-greece-far-from-the-front-but-still-paying" -->
## Britain and Greece: Far From the Front but Still Paying

Proximity to the Russia-Ukraine War is not the only deciding factor. Aside from the United States, two other nations far from the action have historically paid their dues: the UK and Greece.

The third-highest spender as a percentage of GDP, Greece has its own problems to worry about—the biggest of which is fellow NATO member Turkey, a neighbor with whom it has fought several wars and maintains an active dispute over Cyprus. High defense spending therefore makes as much sense for Athens as it does for Warsaw.

The United Kingdom is a special case. A one-time military superpower, it still likes to think of itself as a "tier one" power, a smaller version of the USA. Whether that is really the case is debatable, but what is not up for debate is Britain's defense spending. At 2.3 percent of GDP, that translates—in raw money—into the second-highest military spend in NATO. Globally, only five capitals spend more on defense in actual dollars than London.

Europe as a whole also deserves a mention. As a bloc, the continent's NATO members spend exactly two percent of their collective GDP on defense. As Politico points out, that is a huge jump from the collective 1.49% Europe spent in 2014. But NATO isn't only a group endeavor. Just as there are individual capitals shouldering the military burden, there are others that have been slacking off for decades.

<!-- aeo:section end="britain-and-greece-far-from-the-front-but-still-paying" -->
<!-- aeo:section start="the-laggards-who-are-finally-turning-the-ship" -->
## The Laggards Who Are Finally Turning the Ship

Among people who get worked up about Europe not paying enough for its own defense, one nation in particular acts as the continental boogeyman: Germany.

Germany spent the decades after the Cold War playing the part of the ungrateful roommate who refuses to pay their fair share of the rent. Even after Chancellor Olaf Scholz announced a 100-billion-euro special fund for military modernization in the wake of Russia's invasion, defense spending remained weak. The 2023 figures show Berlin hit a mere 1.57% of GDP. For those sympathetic to Trump's comments, this is the textbook case of a nation not pulling its weight. After recently overtaking Japan, Germany is now the world's third-largest economy. If any capital could afford to spend more, it is surely Berlin.

All of which is why the recent news was so welcome. Shortly after Trump made his comments, German defense minister Boris Pistorius announced that Germany was allocating the equivalent of $76.8 billion for defense spending in 2024. In Pistorius's words, this means Berlin "will reach the agreed 2% target this year." The announcement—on February 15—caps a two-year transformation of Germany's relationship with its military. From a mostly pacifist state haunted by its Nazi past, recent surveys by PwC show nearly 70 percent of Germans now support more defense spending.

On Ukraine, too, Germany has gone from being an unenthusiastic supporter to the third-largest overall contributor after the United States and the European Union. On the very day this analysis was prepared, Scholz announced a new support package for Ukraine worth $1.22 billion. This is what it means to say mainstream reporting has been abysmal: look at most American media, and Germany is still portrayed as it was in 2022—a dithering, low-spending laggard, rather than the military behemoth it is now trying to become.

Of course, one shouldn't paint an overly rosy picture. The commissioner for Germany's armed forces, Eva Högl, has said the special 100-billion-euro fund needs to triple in size to bring Berlin's military up to scratch after decades of neglect. Still, 2024 appears to be the year Germany at last begins to take up its mantle as a defense leader in Europe.

<!-- aeo:section end="the-laggards-who-are-finally-turning-the-ship" -->
<!-- aeo:section start="france-s-quiet-recovery" -->
## France's Quiet Recovery

Nor is Germany the only laggard finally turning the ship around. There is also France. Although France gets a bad reputation in some media for not paying its dues, the reality is that Paris has always spent a significant amount on defense. At 1.9% of GDP, it was the highest-spending country in 2023 to not breach the 2% threshold.

France is also one of Europe's only true military powers. The sole EU country with nuclear weapons, it projects strength around the world like no other NATO power except the US. To be fair to Paris, it is also implementing a plan that was supposed to haul it across the two percent limit by 2025. The word "was" is deliberate, because France actually wound up hitting the target early. With a 2024 budget of €47.2 billion, Armed Forces Minister Sébastien Lecornu was able to announce that Paris would cross the two percent threshold this year. And it is not stopping there. Under the seven-year military planning law, spending is due to rise to almost 70 billion euros in the coming years.

As with Germany, though, this silver lining comes with a dark cloud. After spending close to three percent of GDP on defense during the Cold War, Paris hugely scaled back after the financial crisis. Foreign Policy reports that, by 2015, "the country was left with one-third of the troops, one-quarter of the artillery pieces, and one-tenth of the tanks." Even with accelerated spending now, it will take time to make up for such a gutting of the armed forces.

But, at least, things are moving in the right direction—and that is true of a surprising number of NATO countries. Turkey is another nation ramping up defense spending in 2024, in Ankara's case to an insane degree. While few others are aiming to go quite so fast, there are now seven former NATO laggards due to finally cross two percent this year. The Czech Republic, for instance, signed a law last summer committing the country to raise defense spending from 1.5% of GDP to two percent, starting this year. It will be joined by other countries like Bulgaria and Albania. Overall, eighteen NATO members will hit the target in 2024, up from eleven last year. Even some who don't quite make it won't be far behind: Norway recently committed to the two percent target, and while Oslo won't hit it in 2024, it should in 2025 or 2026.

In short, NATO countries as a whole are rising out of their slumber, with even many of the laggards now racing to get their acts together. But not all of them.

<!-- aeo:section end="france-s-quiet-recovery" -->
<!-- aeo:section start="the-freeriders-who-refuse-to-budge" -->
## The Freeriders Who Refuse to Budge

Look at any graph of NATO members' spending and you might notice something odd. Although there are 31 members, most datasets rank just thirty nations by spending. It is not because newest-member Finland hasn't had time to submit figures. Rather, it is because founding member Iceland is deliberately excluded. As a nation without any armed forces, Iceland effectively doesn't spend anything on defense. As a result, Reykjavik is normally considered a special case—one that shouldn't really be held to the two percent standard.

Nor is it the only one. Although it lies at the bottom of every ranking—spending just 0.72% of GDP—Luxembourg is widely agreed to be another special case. A country of just 640,000 people—of whom about 47% are foreigners with residency—and an army comprising just 900 personnel, Luxembourg is hard to judge by normal standards. On top of its diminutive size, Luxembourg's GDP per capita is so crazily high that it already spends one of the highest amounts per person on defense: $764 for every resident living in the country. Given all this, very few are willing to class either Iceland or Luxembourg as true freeriders—more micronations with their own weird dynamics that can't be judged by normal standards.

No, to locate the true freeriders, you need to look a little higher up the rankings—to the rich, normal-sized nations that nonetheless utterly rely on their neighbors for protection. In NATO circles, the most infamous of all is Belgium. At 1.13% of GDP, it spends the lowest amount of any nation not called Luxembourg or Iceland. This is particularly galling, since in 2014 Prime Minister Di Rupo promised to hit the two percent target by 2024. Now that it actually is 2024, Prime Minister De Croo is instead promising to hit it by 2035—at which point, the next PM will presumably push it back yet again. The Belgian position is presumably that the country is a long way from Russia and has France to rely on for protection. Still, its commitment to low defense spending is so total that the military analysis blog Oryx once declared, "Belgium is often considered the black sheep of NATO."

Another rich country a long way from Russia that also spends painfully little is Spain. At 1.26%, it is only a little worse than another large European economy, Italy. And although Rome pledged to catch up with France and Britain, Defense Minister Guido Crosetto recently admitted the country would struggle to hit the two percent target even by 2028.

<!-- aeo:section end="the-freeriders-who-refuse-to-budge" -->
<!-- aeo:section start="canada-the-embarrassment-across-the-ocean" -->
## Canada: The Embarrassment Across the Ocean

The freeriders aren't all European, though. There is another country an entire ocean away that spends so little on defense the Economist recently characterized its position as "increasingly embarrassing." That country is Canada.

The reason Ottawa doesn't need to splurge on defense is obvious. There is literally no universe in which Russia or China bombs Canada and big brother America doesn't come rushing to help. Even if the US pulled out of NATO, flipped Europe the bird, and declared itself "isolationist forever," it is impossible to imagine Washington not having Ottawa's back. As a result, Canada today spends a measly 1.38% of GDP on defense, a figure so low that—if you discount Luxembourg—it sits among the bottom fifth in NATO.

And unlike former laggards Germany and Turkey, Canada has no plans to significantly increase that spending. According to the Economist, "Leaked Pentagon intelligence documents ... confirmed that Mr. Trudeau had told NATO allies not only that Canada would not reach the 2% commitment (in 2023) but that it 'never' would." Again, this makes financial sense from Canada's perspective. In the same way that Belgium can slack off because France will always defend it, Ottawa is content to rely on America.

But just because something is good financial sense doesn't mean it isn't foolish in other ways. The Economist points out that global warming is opening up Arctic shipping routes—routes contested by Russia and China, and uncomfortably close to Canada's far north. While the battlegrounds right now are eastern Europe and Taiwan, it may not be long before a greater geopolitical competition is taking place in the Arctic, one Canada would be dragged into whether Ottawa likes it or not. Given such an uncertain future, does it really make sense for Canada to be so utterly reliant on American largesse?

<!-- aeo:section end="canada-the-embarrassment-across-the-ocean" -->
<!-- aeo:section start="the-bottom-line-on-burden-sharing" -->
## The Bottom Line on Burden Sharing

At the end of all that, the politics around the two percent rule turn out to be more complicated than most observers realize. Stereotypes about certain countries not paying their way—cough, Germany—are fast becoming outdated, unreflective of the new era of uncertainty most NATO members are living through.

That said, it is also clear that NATO's collective deterrence can only work if enough allies are willing to put the money in—to build militaries so robust that even the madman in the Kremlin will think twice about trying to move his borders westward. Because, scary as it is to say, NATO may not always be able to rely on America. As much as anyone might pray that's not the case, the only surefire way to hedge against that outcome is to do what 18 members are already doing: start building formidable deterrence. Deterrence that, hopefully, will ensure a costly NATO war with Russia never comes.

<!-- aeo:section end="the-bottom-line-on-burden-sharing" -->
<!-- aeo:section start="frequently-asked-questions" -->
## Frequently Asked Questions

### Is the 2% target a legal obligation that members can be sued or penalized for missing?

No. While NATO members are treaty-bound to defend one another, they are not treaty-bound to spend two percent of GDP on defense. The figure is a guideline, not a legal duty, and as defense analyst Ulrike Franke noted, members who miss it are not in any kind of breach of contract.

### Does the 2% money go into a NATO fund or get owed to the United States?

No. There is no central NATO pot that countries pay into, and missing the target does not mean owing America money. The 2% figure is what each member is supposed to spend on its own military and research and development, so that collective defense functions as a serious deterrent.

### When did the 2% target actually originate?

NATO had no spending guidelines for its first quarter-century after its 1949 founding. The concept of spending two percent of GDP first emerged at the November 2002 Prague summit, where the Bush White House had pushed — unsuccessfully — for it to be mandatory. It was only formalized as a ten-year goal in 2014, after Russia annexed Crimea.

### Which NATO country spends the most as a share of GDP?

Poland. In 2023 it spent 3.9% of GDP on defense, ahead of the United States' 3.49%, and it is expected to cross four percent in 2024. Warsaw has 100 HIMARS rocket launchers in the pipeline and over 1,000 heavy tanks, prompting predictions it will become Europe's largest conventional army.

### Why is proximity to Russia such a strong predictor of high spending?

States closest to the threat spend the most. Practically every nation bordering Russia or Belarus — Estonia, Finland, Latvia, Lithuania, and Poland — pays significantly over two percent, with Norway the sole exception at 1.67%. As Politico put it, the closer to Russia, the higher the spending.

<!-- aeo:section end="frequently-asked-questions" -->
<!-- aeo:section start="related-coverage" -->
## Related Coverage

- [How Powerful Is Turkey? The Military and Geopolitical Rise](/articles/military/how-powerful-is-turkey-military-geopolitical-rise)
- [Britain's Military Overhaul: Ambitious Plans, Uncertain Future](/articles/military/britains-military-overhaul-ambitious-plans-uncertain-future)
- [Who Could Lead Europe to War](/articles/geopolitics/who-could-lead-europe-to-war)

<!-- aeo:section end="related-coverage" -->
<!-- aeo:section start="sources" -->
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