By: Ebba Lewenhaupt
The 2025 NATO Summit concluded in June to a backdrop of escalating conflicts. As the dust settled, it became clear that NATO faces not only a new world but some of its greatest challenges yet. Previously satisfied with relying on their bigger cousin in the United States, Europe has massively stepped up with a new spending target of 5% of GDP on defence, far exceeding the official 2% target of NATO. However, the fanfare belies a hidden anxiety. Is the 5% target achievable for NATO members? Is this just a way for the alliance to appease US President Trump? And what of the continued American support for Ukraine, or indeed Article 5?
Setting the Scene: High Stakes and Fine Balances
As Russia’s war in Ukraine continues to rage on with indescribable brutality, tensions also rose in the Middle East following Israeli and American attacks on Iran, providing an even higher-stakes backdrop to an already tense situation. Earlier in the year, President Trump had seemingly threatened NATO members Canada and Greenland with annexation. Under new Secretary General Rutte, for whom this was the first summit under his leadership, it was bound to become a balancing act for European leaders.
One such balance was between transatlantic unity and the diverging interests of Europe and the US. As China grows in both soft and hard power, American eyes have started turning towards Asia, whereas for Europe, Russia remains a much more direct threat. The Iran strikes forced NATO to trim and re‑prioritise its already‑tight Summit agenda, which was not able to focus as much on defence spending and Ukraine as was hoped.
Three Key Takeaways
Takeaway 1: Major Increase in Spending Commitments
The biggest news of the Summit was a shared commitment from all members to increase defence spending to 5% of GDP. The target’s breakdown is 3.5% on traditional defence, such as troops, equipment, operations and weapons, while 1.5% on broader security-related areas, such as critical infrastructure that supports military operations (e.g. bridges and ports) and investments in cybersecurity and energy resilience. The 1.5% are much more flexible in their use, as the category is broader and open to interpretation. Furthermore, at least 20% of the overall budget will be spent on research and innovation to ensure a technological edge well into the future.
However, this big step does not come without criticism. While it may be ‘about time’ that European leaders step up after decades of demilitarising, the leap to 5% may still be an unrealistic expenditure for several members. As a result, they would most likely have to cut down on other critical areas of spending, such as social welfare programs and climate management or relaxing debt brakes. Furthermore, countries without a significant defence industry of their own may struggle in justifying such cuts and would perhaps instead turn to increased borrowing, as such expenditures would not necessarily stimulate their own economies. That is, if you haven’t negotiated a carve-out.
A major problem in members’ defence may not be a lack of spending, but inefficiency. This is best illustrated by Europe’s highly fragmented approach to procurement. Rather than collaborating to purchase common vehicles, weapons, and equipment, countries would rather buy and develop their own unique systems. This duplication prevents economies of scale, drives up costs, and severely undermines interoperability. Experts and recent reports stress that standardizing and jointly procuring equipment could deliver far greater capability for the same money, however this is highly controversial among countries with their own defence industry (such as Germany and France) as they remain protective of their own industries.
Takeaway 2: Continued and Formalised Ukrainian Support
With Europe now taking more responsibility, support for Ukraine continued to be a focus. Members agreed that some of the 5% could go towards Ukraine and still count towards the overall goal. This not only bolsters Ukraine’s defence against Russian aggression but also deepens its political ties to NATO. It symbolises a strong stance against Russia’s war in Ukraine, as well as a show of personal responsibility and goodwill towards President Trump, who has long criticized his European allies for their shortcomings in NATO and previously hesitated in his support of Ukraine. European leaders no doubt hope this will strengthen President Trump’s commitment to NATO, while also reaffirming their own priorities.
However, here too are concerns. Diverting funds from critical infrastructure and investments could risk diluting the focus on core military capabilities. A degraded Russian military is to Europe’s advantage, as they are unlikely to open another front while they are tied up in Ukraine, so investing in Ukraine is effectively investing in Europe’s own defence capabilities. However, it is important to proceed with caution, as Russia continues oiling its war machine with frontline experience that Europe lacks.
Takeaway 3: Increased Focus on Hybrid Threats and Internal Divisions
Another notable feature was an increased focus on hybrid threats from Russia, which are ‘below the threshold’ of overt military action yet still damaging to Europe’s cohesion and security. The increased focus is due to an escalation of acts of sabotage around Europe, from cutting internet cables at the bottom of the Baltic sea to an arson attack which burned down a mall in Poland. Indeed, some of the 5% will go towards increasing resiliency in the face of such systemically threatening actions.
However, protecting against hybrid attacks can be difficult, as they operate in the shadows. Europe can protect itself against loss of Internet access by having systems in place that divert traffic through other cables. But how can it prevent Russia from influencing elections through social media? From promoting populist and pro-Russian forces, as in Romania last year? The members deliberately avoided detailed operational commitments or unified doctrine to combat hybrid threats, highlighting the difficulty of the subject.
The systemic threats to NATO do not stem only from physical hybrid attacks, but also from exploiting the internal divisions within NATO. The new 5% commitment may go a long way to mend relations with an unpredictable Trump administration, but may deepen rifts between members of differing economic capacities. Germany and France, for example, remain protective of their own defence industries despite standing to gain the most from an increased flow of investment. For countries far away from the Russian border, such as Spain, the threat may not feel as imminent, so it may be hard to justify such a steep cost to the public. It begs the question: is an alliance truly only as strong as its weakest link?
So… What Now?
The next step for each member will be to present a plan as to how this spending target can be achieved over the coming decade, although some countries have already developed them. The new spending commitments signal a greater European responsibility within the alliance, which may satisfy American demands, but may also yet sow further discord between its members, especially as some countries face political backlash at home. While this commitment was a huge leap forward for NATO and may strengthen the alliance significantly, it will be impossible to know their possible effect before the plans are presented. Indeed, although it may seem like a strong show of unity, the alliance will have to continue this fragile balancing act for many years to come.
To make matters worse, Russian hybrid attacks are not just likely to continue, but increase in intensity, which could cause enormous economic and psychological damage throughout the alliance. Although more attention is being paid to hybrid attacks, much of Europe’s critical infrastructure remains vulnerable. Without a common strategy, NATO’s ability to proactively deter or react to sabotage remains limited and reactive. European members may have to adjust to this new reality much quicker than they thought, with America toying with the idea of pulling troops away from the continent and towards other strategic interests.
As NATO looks to the future, its success will hinge not only on its ability to project strength, but on its capacity to evolve. It will, over the coming decade, contend with both conventional and nonconventional threats, while also struggling with internal cohesion in a time when priorities shift rapidly. The world looks very different now than it did when the alliance first formed 76 years ago, but history does have a way of rhyming. The question is whether NATO can still carry the tune.
Image: NATO-Ukraine Council Working Dinner in Foreign Ministers’ session NATO/OTAN Summit 2025, June 24, 2025. Source: Ministerie van Buitenlandse Zaken/Aaron Zwaal. CC BY-SA 4.0.
Edited by: Alexander MacDonald and Jekaterina Savicka