Spain reaches deal with NATO for 5% spending target exemptions

OVIEDO, Spain

Spanish Prime Minister Pedro Sanchez announced Sunday that Spain has secured a deal with NATO allowing exemptions from the alliance’s 5% of GDP defense spending target.

“We’ve reached a deal that can harmonize the legitimate desire of the majority of members of the alliance to reach the 5% target with the rights of other nations not to do so when they deliver on their obligations,” Sanchez said in a televised speech.

Madrid had been threatening to block the new target at the NATO summit in The Hague this week.

Sanchez said Spain will not meet the 5% spending target, as it would require spending €350 billion ($400 billion) more per year.

“That would oblige us to raise taxes or severely cut our welfare state,” said Spain’s Socialist premier.

He said the extra spending needed to reach the 5% target would mean an average tax increase of €3,000 ($3,450) per person per year, combined with cuts to pensions, education, unemployment, and maternal leave.

“Every member of NATO has the right to decide whether they want to reach that target, and as a sovereign nation, we have said we will not. We choose a better balance,” Sanchez added.

He said he is “proud” of reaching the deal, which shows that “multilateralism works,” and thanked NATO members and Secretary-General Mark Rutte.

“This deal is a success, which will allow Spain to continue as a first-rate global actor, not only in defense but also in economics and multilateralism, because humanity needs more security but also much more diplomacy,” he said.​​​​​​​

Sanchez added that Spain will continue participating in the alliance and fulfilling all of its military and defense obligations.

Spain is one of the NATO nations that spends the smallest proportion of its GDP on defense. In 2025, it will reach the 2% target—up from 0.9% in 2018.