Key Points – European NATO members, facing President Trump’s intensified demand for defense spending to reach 5% of GDP, are reportedly exploring a “creative accounting” solution.
-This framework, potentially championed by NATO Secretary General Mark Rutte, involves committing to 3.5% of GDP for core military expenditures while designating an additional 1.5% for broader security-related spending, such as civilian infrastructure upgrades for military mobility, cybersecurity, and dual-use technologies.
-While some nations like Germany have indicated support, others like Estonia insist on 5% “real” defense spending. It remains uncertain if Trump will accept this redefinition to claim a political victory.
Will Trump Accept Europe’s Creative Accounting to Meet NATO Spending Demands?
Since assuming office in January, 2025, U.S. President Donald Trump intensified pressure on NATO allies, demanding they increase defense spending to 5% of their GDP, which is more than double the alliance’s longstanding 2% benchmark.
European leaders initially balked at the proposal, with Italian Defense Minister Guido Crosetto calling the target “impossible for almost all the nations in the world.”
Confronted with the prospect of losing U.S. support, NATO leaders and European governments are seeking to satisfy Trump’s demand by increasing military expenditures as requested and broadening the definition of what counts as defense spending.
How Europe Might Do It
Rather than being forced to reprioritize domestic spending and redirect funds to an increased defense budget, European countries look set to follow a proposed new framework put forward by NATO Secretary General Mark Rutte.
Earlier this month, Rutte suggested that alliance members boost their official spending to 3.5% of GDP and commit a further 1.5% to broader security-related spending as a way of meeting President Trump’s demands.
NATO is prepared to defend its creative accounting by citing a recent European Union auditors’ report that highlighted how military convoys, including tanks and other heavy equipment, have been halted at bridges not designed to support their weight and barred from entering neighboring countries due to national weight limits.
The report opens the door to brand-new areas of spending that could count towards NATO spending commitments.
Civilian infrastructure upgrades, cybersecurity, and development of dual-use technologies like cloud computing and AI were floated as candidates for inclusion in the nontraditional expenditures that Rutte suggested be classified under the additional 1.5% spending.
Can The New NATO Spending ‘Plan’ Work?
Not everyone is on board, however. Estonian Foreign Minister Margus Tsakhna pushed back against the flexible new definition of defense spending, pointing to NATO’s own regulations.
“The target of NATO member countries must be 5 percent in the future. And we are not talking about anything other than real defense spending, which is stipulated in NATO regulations,” Tsakhna said during a May 2025 meeting of NATO foreign ministers in Antalya, Turkey.
With NATO leadership now backing Trump’s proposed spending increases, and armed with a plan that appears both actionable and achievable, European countries that once opposed the idea have publicly endorsed it. On Thursday, Germany publicly supported Trump’s demands.
“We are following him (Trump), and we see this as a clear commitment by the United States to NATO’s Article 5,” German Foreign Minister Johann Wadephul said.
Will Trump Approve?
European governments have an incentive to do what Trump says. After all, a withdrawal of U.S. support for NATO would likely see the withdrawal of more than 100,000 U.S. troops stationed across the continent. Europe would also lose access to a significant portion of advanced U.S. military assets currently deployed on the continent, including air defense systems, intelligence capabilities, and heavy equipment like tanks and fighter jets.
The question is: Will Trump accept their creative accounting? Maybe. In doing so, it would allow the president to claim victory and avoid a full U-turn on his threat to withdraw. But if he doesn’t, the next question is: Will these countries go further?
Much depends on the outcome of these discussions. Trump, who has long implied that he is willing to withdraw U.S. support for NATO, appears relentless in his pressure campaign – and European leaders know that he’s serious. Given that the best predictor of future behavior is past behavior, it’s worth noting that Trump has a track record of success in this area.
In his first term, he pushed allies to raise spending, and many responded. Poland plans to spend 4.7% of GDP on defense – the highest in NATO. The United Kingdom also recently reaffirmed plans to raise spending to 2.5%, and Prime Minister Keir Starmer has even signaled ambitions to go beyond that.
About the Author:
Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society. His latest book is The Truth Teller: RFK Jr. and the Case for a Post-Partisan Presidency.
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