The Hague Investment Plan: NATO seeks to redefine ‘defence’ to hit 5% spending target by 2032

23 May 2025

NATO is proposing to redefine and increase military spending targets, aiming for 5% of GDP by 2032, as part of the Hague Investment Plan. The proposal includes 3.5% for "hard military spending" and 1.5% for related areas like infrastructure and cybersecurity. The plan seeks to address longstanding concerns about NATO burden-sharing, with the United States pushing for higher spending. Currently, 22 of NATO's 32 members meet the existing 2% target, but none meet the proposed 5% goal. The Plan’s adoption requires the consensus of all 32 NATO member states.

Politically, the increased spending target could strengthen NATO's unity but also risks internal divisions and voter discontent. Economically, it may boost the defence sector but could strain public budgets and global supply chains. Militarily, it could modernize forces and enhance deterrence but risks escalating tensions with adversaries like Russia and China.

Instead of relying on GDP-based metrics for burden-sharing, a more nuanced approach could consider broader security contributions like UN peacekeeping and political assistance. NATO's spending and planning frameworks also require greater transparency and accountability.