Sánchez tells NATO that increasing defense spending to 5% of GDP is “incompatible” with the welfare state

Prime Minister Pedro Sánchez sent a letter to NATO Secretary General Mark Rutte this Thursday, rejecting the increase in defense spending in terms of Gross Domestic Product (GDP) because it would be “incompatible” with the welfare state.

The letter rejected the goal of allocating 5% of Gross Domestic Product (GDP) to military spending over the next decade, as Rutte proposed to allies at the NATO summit.

“For Spain, committing to a 5% target would not only be unreasonable but also counterproductive, as it would further distance it from optimal spending and hinder the EU’s ongoing efforts to strengthen its security and defense ecosystem,” the letter states.

He also stated that he agrees with Rutte that the EU must help allies improve their interoperability, procurement processes, and industrial base to contribute more decisively to deterring Russia and rebalancing the transatlantic defense burden, not to mention threats from the southern flank. “The EU and its member states are already working on these goals. But to make real progress, we will need time and room for maneuver. And I fear that a hasty increase of 5% would harm this process in two ways,” he warned.

Thus, he explained that forcing Spain to make independent purchases could further exacerbate equipment interoperability problems and allocate a substantial portion of its resources to non-European suppliers, thereby preventing it from developing its own industrial base and exacerbating the current diversion of European savings to foreign markets, which would add some €100 billion to the €300 billion it already transfers annually.

On the other hand, by slowing economic growth through increased debt, inflationary pressures, and the diversion of investment from crucial activities with a greater multiplier effect than the defense industry (e.g., education, healthcare, digital technology), he argued in the letter.

“Ultimately, it’s worth remembering that capabilities are paid for in euros, not percentages of GDP. If we truly want to sustainably increase real spending, our primary objective should be to ensure that our economies grow significantly in the coming years. To achieve this, we must find the right balance between boosting our defense capabilities and boosting our overall economic competitiveness,” he noted.

A final reason, according to Sánchez, that prevents Spain from committing to investing 5% of GDP in defense is because ” such a level of spending would be incompatible with our Welfare State and our worldview. Intentions are powerful, but they rarely surpass empirical reality. And the empirical reality is that, for Spain, as for other NATO countries, achieving 5% defense spending will be impossible unless it comes at the cost of raising taxes on the middle class, cutting public services and social benefits for its citizens, and reducing its commitment to the green transition,” he concluded.

SPAIN, COMMITTED TO NATO

Despite this, he asserted that Spain “is fully committed to NATO. Putin’s cruelty and total disregard for international law and human rights constitute an existential threat that cannot be ignored or underestimated. To neutralize it, we need a stronger NATO, with the United States fully committed, and a more capable Europe, capable of assuming its own defense and security, providing decisive support to Ukraine, and alleviating some of the extraordinary burden borne by the Allies on the eastern flank.”

“Spain strongly supports these common objectives. Therefore, in recent years, it has been the fourth NATO country with the largest average annual increase in defense spending, reaching 2% of its GDP by 2025, and is currently present in Alliance missions with thousands of military personnel and first-class equipment,” he recalled.