NATO defense spending has surged to Cold War levels due to pressure from former President Trump and Russia’s aggression, but experts warn that Europe still lacks the military capability to match its financial commitments.
NATO defense spending has reached unprecedented levels, reminiscent of the Cold War era, largely due to pressure from former President Donald Trump and the ongoing conflict stemming from Russia’s invasion of Ukraine. In response to these challenges, NATO allies have committed to a new framework aimed at increasing defense spending to nearly 5% of GDP by 2035.
For years, Trump criticized NATO allies for their reliance on U.S. military support while underfunding their own defense capabilities. His administration’s threats to reconsider U.S. commitments to allies that failed to meet spending targets transformed NATO’s spending benchmarks into a focal point of political discourse within the alliance.
“What really woke everyone up were two things,” said Jim Townsend, a former deputy assistant secretary of defense for Europe and NATO policy, now at the Center for a New American Security (CNAS). “One was the 2022 invasion by Putin, and the second was Trump, who came in and whether he scared them or he shamed them or whatever he did, that certainly added fuel to the fire as well.”
Countries closest to Russia have been the quickest to respond. Poland now allocates a larger share of its economy to defense than any other NATO member. Additionally, the Baltic states of Estonia, Latvia, and Lithuania have significantly increased their military budgets since 2022. Germany, which had long been seen as a symbol of Europe’s post-Cold War military decline, has initiated a substantial rearmament effort, including a special fund of 100 billion euros aimed at revitalizing the Bundeswehr.
On paper, these financial commitments represent a historic turnaround. According to NATO’s latest annual report, European allies and Canada increased their defense spending by 20% in 2025 compared to the previous year. Since 2014, NATO claims that European members and Canada have collectively added hundreds of billions of dollars to their defense budgets.
As governments across Europe invest in tanks, air defenses, fighter jets, and artillery systems, they are also racing to replenish stockpiles that have been depleted due to the ongoing war in Ukraine. However, this surge in spending has revealed significant limitations in actual military capabilities.
<p”You have to start off with spending more, and you’re not going to see the capability results for a while,” Townsend noted.
The war in Ukraine has highlighted how quickly a major conflict can deplete ammunition stockpiles, strain production lines, and overwhelm peacetime defense industries. While a defense budget can signal political commitment, it does not necessarily reflect the readiness of military forces, the availability of ammunition, or the ability to sustain combat operations once a conflict begins. This is the gap currently confronting NATO.
Historically, NATO assessed burden-sharing primarily through a 2% spending benchmark. This metric was straightforward, public, and easily comparable. Countries that met this target could assert they were contributing their fair share, while those that fell short often faced criticism from the U.S.
However, the situation in Ukraine has demonstrated that simply meeting a spending benchmark does not equate to having sufficient deployable forces. A nation may announce a significant weapons purchase that will not materialize for years, or it may allocate funds toward personnel, pensions, or infrastructure without enhancing its battlefield capabilities.
NATO leaders are increasingly recognizing this distinction. “This is not just about more spending,” NATO Secretary-General Mark Rutte stated in 2026, advocating for “smarter investment in the right capabilities.” Rutte has also emphasized that rising defense budgets must be accompanied by expanded production capacity as NATO strives to replenish stockpiles and prepare for prolonged competition with Russia.
Townsend pointed out that both European and American defense industries have diminished after decades of reduced military spending following the Cold War. “The defense industrial capability in Europe and the United States has atrophied,” he explained. “They lost the scale to be able to surge a lot more production.”
As a result, governments are now confronting the reality that factories cannot instantly produce the weapons NATO requires. “While the money is there and the orders are coming in, the producers are struggling to meet the requirements,” Townsend added.
The conflict in Ukraine has underscored how swiftly modern industrial warfare can overwhelm peacetime production systems. European governments that announced significant procurement plans after 2022 have frequently encountered long delivery timelines, strained supply chains, and shortages in critical sectors, including artillery ammunition and air defense interceptors.
A recent analysis by McKinsey warned that “structural constraints could slow the path from spending to military capabilities,” citing fragmented procurement systems, industrial bottlenecks, and lengthy production timelines across Europe’s defense sector. These delays have also highlighted Europe’s continued reliance on American military technology and production capacity.
<p”Europe right now is dependent on the United States and U.S. industry to provide a lot of the capabilities they know they need,” Townsend stated.
Among the most challenging capabilities for Europe to rapidly rebuild are air defense systems, long-range strike weapons, logistics networks, intelligence capabilities, and robust ammunition stockpiles. “Air defense is what they need and they need long-range fires,” Townsend emphasized, referencing systems such as Patriot missiles and High Mobility Artillery Rocket System launchers that European governments are urgently trying to acquire.
As demand for these systems surged following Russia’s invasion of Ukraine, production timelines have extended. This has prompted some NATO countries, such as Poland, to seek alternative suppliers, including South Korea, in search of faster delivery options. Concurrently, European governments are working to expand domestic production capacity to lessen their dependence on U.S. suppliers. Germany has increased ammunition production, and some civilian industrial firms are shifting portions of their operations toward defense manufacturing.
Despite these efforts, Townsend cautioned that rebuilding Europe’s military capacity will take years. The pressing question remains whether NATO can close the capability gap quickly enough to deter potential aggression from Russia.
Will the Russians take advantage of this gap? Townsend asked, highlighting the urgency of the situation.
According to Fox News, the future of NATO’s military readiness hinges on the alliance’s ability to translate increased spending into tangible capabilities.