Spain reaches an agreement with NATO that exempts it from spending 5% of GDP on defense.

After three months of negotiations, intensified in recent days by "public and private" pressure, as sources from the Moncloa acknowledged yesterday, the government reached an agreement with NATO at midnight on Saturday that will exempt Spain from spending 5% of its gross domestic product (GDP) on defense. The formula, which involves amending the text of the allied declaration with ambiguous language, will allow each country to allocate whatever it deems appropriate to military budgets, provided that the capability targets recently approved by the Alliance's 32 defense ministers are met.

The nuance in the text is minimal, but sufficient to accommodate Spain's refusal. The new wording of the final declaration no longer requires "all allies" to subscribe to the 5% of GDP target, but rather only "allies," without specifying the target, which provides a greater degree of flexibility.

Not even the "utmost concern" expressed yesterday by the Ministry of Foreign Affairs over the situation in the Middle East has changed Pedro Sánchez's roadmap for the summit to be held tomorrow and Wednesday in The Hague. Sánchez had already warned NATO Secretary General Mark Rutte of this in a letter on Thursday: Spain will flatly refuse to adopt the 5% target, considering it unreasonable and counterproductive.

NATO's Secretary General "understands" that Spain "is convinced" that it does not need to invest 5%

Early yesterday morning, that letter was also responded to by letter. In it, Rutte confirmed that the upcoming summit "will give Spain the flexibility to determine its own sovereign path" to achieve the capability targets, allowing it to present its own annual plans. In the letter, Rutte informed Sánchez that he "understands" that Spain "is convinced" it can meet these targets with spending less than 5% of GDP, following the breakdown of 3.5% for defense and another 1.5% for security proposed by the Secretary General of the Alliance.

The declaration will also decouple the percentage of military spending from NATO's capability targets (the specific air defense, ground forces, or logistics that each member country must provide). The government also made this point yesterday. According to government sources, this aspect was fundamental for Spain because the Moncloa government is convinced that the targets assigned for the 2026-2029 period will be met by allocating 2.1% of GDP. "No more, no less," the president of the government summarized in an official statement.

Pedro Sánchez reappeared from the Moncloa Palace after days of isolation due to the reversal in the Koldo case investigation, which has led the Supreme Court to indict his last two organization secretaries in the PSOE. Convinced that the storm will subside—today he will resume his agenda with an event with former Prime Minister José Luis Rodríguez Zapatero to mark the 20th anniversary of the approval of same-sex marriage—he boasted about the agreement because it does not cross the red line he had set: not to "compromise" the welfare state. The Prime Minister cited figures to illustrate that meeting the 5% of GDP target for defense would require spending an additional €350 billion. In other words: €3,000 annually in taxes for each worker.

The president believes that the Spanish figure is sufficient and does not "compromise" the welfare state.

“The international press maintains that the ultimate goal remains 5%. Sánchez must answer all the doubts that are arising. He can't pretend to continue lying to everyone,” criticized the leader of the PP, Alberto Núñez Feijóo, in a message on the social network X, a circumstance that Sánchez took advantage of to respond with Rutte's letter and a laconic “here, Alberto. Let someone translate it for you. Let's see if that clears up your doubts.”

For his part, the PP spokesperson in Congress, Miguel Tellado, denounced that Sánchez had appeared not to discuss defense or foreign policy, but rather to divert attention from domestic politics and the corruption cases that, in his opinion, are stifling him.

NATO diplomats believe the solution can work for everyone, and they believe that, all things considered, it's a dignified outcome because, on paper, the 5% target that US President Donald Trump wants to impose is maintained. This afternoon, in The Hague, Rutte could clarify these details at a press conference.

Rutte offers flexibility with a change in the statement to accommodate the Spanish refusal

It will also be interesting to see if Trump agrees. At his first summit, the tycoon arrived with a notebook in which he had handwritten the amount each country was investing in defense, berating the less generous ones. On Friday, he had already said publicly that NATO "will have to deal" with Spain if Madrid refuses to adopt the same levels as the rest. NATO sources indicated that the declaration has now been agreed upon "by all allies."

Another key aspect of the declaration is the timeframe within which the allies—with Spain's permission—are committed to the new 5% target. There was some disagreement on this matter. The proposal circulating in recent weeks was to reach this commitment in seven years, by 2032. Even some allies, especially the Baltic countries, believed it was impossible to wait and advocated for five years. However, other less enthusiastic allies, such as Italy, asked for more time and opted for ten years. One of the latest drafts had already secured this greater flexibility, establishing that the new commitment should be reached by 2035.

The keys to the agreement

1. The ambiguous formulation. To accommodate the Spanish exception, the draft declaration to be signed by NATO leaders in The Hague has changed the wording of the subject of those who will commit to 5% of GDP for defense: instead of "we" (the heads of state and government present in The Hague), the wording would be "allies." 2. The time horizon. The organization is working to achieve 5% of military spending in ten years, by 2035, and not in seven, as demanded by countries most exposed to Russia, such as the Nordic and Baltic countries. 3. The review. The draft also mentions that "the trajectory and spending balance" of this plan will be reviewed in 2029, "in light of the strategic environment and updated capability objectives." This is the same year Donald Trump's second term in the White House is due to end. It is possible that the future occupant of the Oval Office will be less demanding. 4. The breakdown. The allies are adopting the formula proposed by Mark Rutte, which breaks down the 5% into 3.5% for pure military spending and another 1.5% for related spending, such as infrastructure or cybersecurity.

There are more signs for the laggards. For example, Rutte wanted mandatory annual increases, something that doesn't appear in the draft. It also mentions that the implementation of the plan to achieve the new military investment will be reviewed in four years, in 2029, "in light of the strategic environment and updated capability targets." This is commonplace, but, curiously, it's the same year that Trump's second term, the president who has been trying to impose this new spending target for months, is supposed to end.

The government unblocked the situation on Saturday night, after days of "public and private" pressure.

Washington's involvement in the conflict between Israel and Iran gives even more significance to the meeting in The Hague, where, due to the fuse in the Middle East, the situation in Ukraine risks being relegated to the background. For the moment, and unlike the two previous summits—where he was the star guest—the participation of Ukrainian President Volodymyr Zelensky has been relegated to a formal dinner on Tuesday evening.