EU Confidential

Episode: What’s really behind Europe’s 5% defense push

Release Date: June 20, 2025
Host: Sarah Wheaton (POLITICO)

Overview

This episode focuses on the European debate around dramatically raising defense spending to a new NATO target of 5% of GDP — a significant jump from the long-standing 2% goal. As the NATO summit in The Hague approaches, POLITICO explores the pressure on European governments to act, the economic and political trade-offs, the underlying motivations behind the push (including pressure from the U.S. and Donald Trump), and alternative visions for European security—especially from politicians in Belgium and Germany who challenge the new status quo.

Key Discussion Points

Setting the Stage: Why a 5% Defense Target?

• Host Sarah Wheaton introduces the main questions: Why is the 5% target being proposed now, is it realistic, and what could it cost European societies?
• Mark Rutte (NATO Secretary General) recently argued that Europe needs to spend "considerably more than 2%" on defense — despite the political difficulty of shifting money from social programs to military budgets.
  • Notable quote: “2% is not nearly enough to stay safe... allies will need to spend considerably more than 2%.” — Mark Rutte [00:31]

The Underlying Dilemma:

• Host frames the debate as "tanks versus pensions" or "guns versus butter:"
  • Where will the money come from for this defense surge?
  • Are cuts to pensions, schools, and healthcare acceptable trade-offs for security?
• High stakes heading into the NATO summit, with war in Ukraine ongoing, and security concerns in Gaza and the Middle East [01:26].

Expert Analysis: Michelle Haas (Defense Analyst, Ghent University and Egmont Institute)

[04:10–16:42]

Origins and Mechanics of the 5% Target

• The 5% figure includes both military and defense-related investments; the "real" core increase for actual defense hardware and capability is about 3.5%, with 1.5% potentially covering infrastructure, cyber, and resilience.
• The post-2014, post-Ukraine context led to the 2% goal, but more recent defense planning highlighted greater capability needs.
• "We knew that a bigger jump of the NATO norm was coming up. A lot of analysts expected something around 3, 3.5%. So that is actually the new NATO norm. We can call it the 3.5%. And the 5% also includes this 1.5% of defense-related investment.” — Michelle Haas [04:55]

Is the 5% Push Just Donald Trump’s Idea?

• Trump’s pressure has accelerated the push, but even a different U.S. administration would have led to higher European defense spending, due to structural NATO military shortfalls since 2022.
  • “Diplomatic pressure has actually become the decisive factor pushing them to ramp up defense spending.” — Michelle Haas [06:28]
• Ultimately, the 5% is as much Europe’s plan as the U.S.'s.

Will All Countries Fall in Line?

• Almost all NATO members are expected to endorse the target “on paper,” but real implementation is questionable, especially given domestic politics and fiscal constraints.
  • Some states (Spain, Belgium, Italy) struggle just to hit 2% and face big obstacles ramping up.
  • It’s a “growth trajectory” rather than an immediate demand, with no set annual target yet.

The "Guns vs. Butter" Debate Is Too Simple

• European states have more than a binary choice; different paths include:
  1. Raise taxes (e.g., Estonia’s defense tax)
  2. Increase debt (e.g., Poland, which massively ramped up defense via borrowing)
  3. Reallocate existing spending
  • Domestic politics and fiscal culture shape national responses.
  • “For Nordic and Eastern European countries, they view... military spending as a way to preserve the social system, something not really felt in some parts of Western Europe.” — Michelle Haas [09:29]

National Threat Perceptions & Strategic Communication Matter

• Proximity to Russia shapes urgency: “countries that are closer to Russia have been much more willing to boost their defense spending and really do whatever it takes...”
• But history, political culture, and even specific events (like the MH17 crash in the Netherlands) play a big role.

Belgium as a Case Study

• Belgium has low threat perception, high taxes, and high debt, making defense increases politically toxic.
• Haas notes: “Even going beyond [2%], which they now will agree upon at the NATO summit, will prove to be a big challenge.” [13:11]
• Lack of democratic debate and deep political resistance, especially from Christian Democrats and French Liberals.

Is the 5% Goal Real or Just Theater?

• Haas predicts a gap between “discourse and action.”
• The industrial angle: Deepening partnerships with Ukraine—including defense industry ties and readiness—will be key.
• “The best deterrence for Europe is to help Ukraine survive and to work together with Ukraine...” — Michelle Haas [15:36]

Center-Right Response: Sami Mahdi (Chair, Flemish Christian Democrats, Belgium)

[18:27–32:36]

Skepticism Toward 5% and Alternative Proposals

• Although Belgium's government backs the goal, Mahdi calls 5% “crazy,” pointing out that Europe already vastly outspends Russia:
  • “If you look at... NATO, right now, we spend 1,500 billion euros on defense. The EU, 450 billion. If you compare that to our biggest threat right now, Russia, they spend $150 billion.” — Sami Mahdi [19:49]
• Argues for efficiency and cooperation over raw expenditure:
  • "We have 178 different types of weapon systems in the EU; we have 17 types of tanks; the US only has one. ...With the same amount of money, we could do way more than we’re doing right now." [21:17]
  • Proposes a European defense industry/European army, addressing inefficiency and sovereignty tension.

The Danger of Political Extremism

• Warns that heavy investment in national militaries without coordination could backfire if “extreme right populist” parties take power.
• “I would prefer to make sure that with all the European countries, we shake hands... and we make sure that we work towards European defense.” [22:12]

Solidarity & Fairness

• Draws a parallel to migration debates, noting the need for burden-sharing:
  • "There is a question about solidarity regarding defense. Bottom line, I think both are right. And the only way to make sure that you have that kind of solidarity is by working together." [23:58]

The Need for EU Defense Industry and Strategic Alignment

• Advocates for an “Airbus-style” defense approach: EU-wide design and procurement rather than fragmented national systems.
  • “...the only way to move forward towards finally a European army...” [25:10]

Political Risks of 5%

• Large increase could threaten social programs and alienate voters:
  • “Investing 5% of our GDP in defense would mean €6,000 less for each family in Belgium.” [26:55]
  • "We could lose a lot of our citizens [politically] if the price of inefficiency is their Social Security, their pension, their purchasing power." [25:55]
• Warns of rising populism if social costs are too high.

Transparency and Debate

• Calls for honest public debate about what’s feasible and necessary, rather than political theater to please Washington or NATO.
  • “We should have an honest debate about it, and not just at the level of the NATO. Accept the 5% and then go back to our countries to ask ourselves the question, how on earth are we ever going to make the 5%?” [31:57]

Center-Left View: Ralph Stegner (German Social Democrats, Bundestag)

[32:43–43:52]

The SPD Peace Manifesto & Opposition to Rearmament

• Stegner co-authored a public letter opposing Germany’s planned 500 billion euro defense increase and calls for redirecting resources to poverty eradication and climate change.
  • Emphasizes the dangers of an “arms race” and pushes for renewed diplomacy, arms control, and negotiation — even as Europe faces Russian aggression.

Why Did Diplomacy Fail, and Can It Work Again?

• Admits recent diplomatic failures, but insists on exhausting peaceful options.
  • “There's no alternative to try... Everything really has to be tried, that we don't end up in arms race and wars.” [36:09]
• Meeting with Kremlin-linked officials is controversial, but Stegner defends contacts: “If you don’t have contacts, you don’t have influence.” [37:20]

Pushback Within Germany & EU

• The SPD Peace Manifesto is rejected by Defense Minister Pistorius as “denial of reality,” but Stegner points out the split between public and elite opinion.
  • “We have record high expenditures in military all over the world. And I think we don’t lack weapons. We lack the means and perhaps the political will to do something about the real problems…” [39:49]

The Numbers Don’t Add Up

• Warns 5% would mean “225 billion euros every year” — up from Germany's current 90 billion — potentially sacrificing education, welfare, and social stability.
  • “That’s almost an invitation for populist parties to give them the numbers they need to shake our stability in democratic societies..." [41:15]

What Does the Public Think?

• Despite elite criticism, Stegner cites polling that half of Germans support the manifesto.
• Stegner: “My generation is the first in my country to live in peace and prosperity and freedom. And I think we have the obligation to see that this is fate for our children and grandchildren as well.” [38:40]

Notable Quotes & Moments (with Timestamps)

• Mark Rutte on Defense Priorities:
  "Allies will need to spend considerably more than 2%. I know spending more on defense means spending less on other priorities." [00:31]
• Michelle Haas on the Real Numbers:
  "The new NATO norm purely on defensive investments is actually 3.5%... the 5% also includes this 1.5% of defense-related investment." [05:00]
• Sami Mahdi on Military Efficiency:
  "We have 178 different types of weapon systems in the EU...with the same amount of money, we could do way more than we’re doing right now." [21:17]
• Sami Mahdi on Social Cost:
  "Investing 5% of our GDP in defense would mean €6,000 less for each family in Belgium." [26:55]
• Ralph Stegner on Prioritizing Peace:
  "We don’t lack weapons in the world. We lack the means and perhaps the political will to do something about the real problems... hunger, poverty, the environment." [39:49]
• Ralph Stegner on the Risk of Populism:
  "That's almost an invitation for populist parties... to shake our stability in democratic societies that are already under pressure." [41:15]

Segment Timestamps

• Introduction & Host Framing: [00:31–04:10]
• Michelle Haas Interview: [04:10–16:42]
• Sami Mahdi Interview: [18:27–32:36]
• Ralph Stegner Interview: [32:43–43:52]

Summary & Takeaways

1. The 5% defense spending target is seismic—but much of the increase is not hard military spend, and implementation will be slow, contingent, and politically fraught.
2. Trump’s pressure accelerated, but did not create, the push; even under a different U.S. president, Europe would have faced a reckoning on defense spending post-Ukraine.
3. Political and fiscal cultures shape how (and if) nations try to meet the target:
   • Some will use higher taxes, some debt, some budget reallocations.
   • Close-to-Russia countries more urgently accept spending increases, while distant ones debate the trade-offs.
4. Critics (Mahdi, Stegner) question both the necessity and efficiency of such a big increase, stressing European cooperation, defense industry development, and the political risk of sacrificing social stability.
5. Underlying public opinion is split—polling suggests concern about both security and social costs—while political elites argue over the right balance.

Overall Tone:
Balanced, analytical, occasionally skeptical, with emphasis on nuanced debate over simple slogans; the show features direct, candid critiques alongside policy wonks' detailed explanations.