When Donald Trump returned to the White House last year, it was no surprise that NATO quickly ended up in his “crosshairs” due to the chronic imbalance in defense spending between the USA on one side and the European countries (plus Canada) on the other.
An imbalance that, it must be acknowledged, really exists; so much so that from the point of view of some very specific (and decidedly important) operational capabilities, the contribution of the USA in the defense of Europe remains fundamental. It is no coincidence that long before Trump, Washington had sent more or less polite invitations for the Old Continent to increase its financial commitment and, with it, also its operational capabilities. What changes now, however, are the tones, evidently much more direct and sometimes even accompanied by threats.
Thus, based on what was decided at the NATO summit in June last year, which led to the definition of new military spending targets (3.5% of GDP dedicated to the so-called “Core defence,” plus 1.5% dedicated to “Defence and security related”) to be reached by 2035, understanding how individual countries are moving along this path becomes essential. Consequently, the same annual report of the Atlantic Alliance on military spending ends up becoming a rather anticipated appointment itself.
HOW RELIABLE IS THIS REPORT REALLY TODAY?
Before delving into the figures contained therein, some general considerations are necessary to better frame a context that, moreover, appears to have “worsened” significantly over the last 2 years; insofar as this report increasingly suffers from serious reliability problems that can be traced back to at least a couple of reasons.
The first is somewhat “historical,” in the sense that it involves the classification criteria for defense spending adopted by NATO for some time, which consists of a large number of items, some of which are themselves too generic. In fact, the perfect mechanism to allow those struggling to meet certain spending parameters to “play” with the numbers. Proof of this is the fact that in 2025 a sizable group of countries that were still below the old 2% parameter “magically” reached it at the Hague summit.
The second refers instead to the choice to introduce at the same Hague summit the 5% parameter which, however (as mentioned earlier), must be separated into spending for “Core defence” and “Defence and security related.” An ambiguous formula, which will provide room for further accounting “alchemy” and whose little real value is demonstrated precisely by the fact that NATO itself in its document practically does not even consider the second category of spending.
In short, while understanding that the “Trump cyclone” is putting every existing balance to the test, it still seems necessary that this opaque phase ends as soon as possible; and that we can therefore return to reasoning as soon as possible on more truthful numbers, in order to have more realistic and reliable situation frameworks.
A GENERAL OVERVIEW OF 2026
As for NATO as a whole, total military spending (USA, Canada, and European countries) reaches the sum of 1,809.9 billion dollars. To give an idea of the progress made, it is recalled that in 2015 (the year in which they reached their negative peak of 895.7 billion dollars) this represents a doubling. However, once a more realistic calculation principle is duly introduced, based on constant prices, that progress is significantly reduced; still standing just under 50%. Which, considering the 11-year time span, remains a truly remarkable figure!
But the even more interesting aspect is another; namely that this increase was largely driven precisely by Europe and Canada, which together (and always in real terms) recorded an increase of over 120% in their defense allocations over the same period. Whereas the increase in the USA is decidedly more modest. So much so that the gap that was enormous until about a dozen years ago (by virtue of the fact that Washington accounted for 73% of the cumulative NATO spending) has now greatly narrowed (down to 57%, still of the total). With a prospect of an upcoming equalization; at least.
If we then consider the fateful issue of the percentage ratio between defense spending and GDP, it is observed that it is also further increasing; the NATO average is 2.86% (it was 2.46% in 2015) and once again the interesting data is the growth of Europe and Canada, which rose from 1.40% in 2015 to the current 2.53% (against 3.17% for the USA).
Going into even more detail, it is noted that there are already 5 countries that reach and exceed (by far) the 3.5% parameter in terms of “Core defense.” Leading is Lithuania (5.33%), followed by Estonia (5.1%), Latvia (4.92%), then Poland (4.68%) and finally Greece (3.65%). But others (Denmark especially) are not far, while others still (first and foremost Germany) already have solid plans to reach that percentage even before the 2035 deadline.
THE “ITALY CASE”
While the analysis of the numbers relating to 2026 will be discussed shortly, it becomes interesting to focus first on those of last year. As is known, in fact, in 2025 the Government communicated to NATO a value of its military spending sharply increased compared to 2024, which was however only partly due to a real increase in resources; whereas most of it was linked to mere reclassifications of items already present in the State budget. An operation that already appeared rather “reckless” then and becomes even more so today in light of a couple of new developments that have emerged in the meantime.
The first is related to the greater details now known about what was done; that is, which items were reclassified as military spending. Specifically, these include: contract funds at the Ministry of Economy and Finance, additional contributions and privileged pensions, expenses of the National Cybersecurity Agency, expenses for space-related projects, expenses of the Ministry of Infrastructure and Transport for “dual use” projects, expenses for forces contributing to national defense in wartime (rates of the Carabinieri, the Guardia di Finanza, and the Coast Guard). Practically, everything and more!
And confirming how inconsistent such reclassification is from every point of view is the fact that with it Italy becomes the NATO country with the highest percentage of resources allocated to Personnel; a clear indication of an imbalance in their allocation and, therefore, of poor effectiveness of military spending itself.
The second novelty emerging directly from the NATO report is the extent of the variation processed by our own country. From the €45,315 million indicated last year, it rises to the €47,183 million revised in this report; consequently, the variation compared to 2024 now becomes as much as €13,781 million. However, considering that Italy between 2019 and 2020 had already proposed a similar operation (with an increase in just one year of over €5,300 million, without any correspondence in the Defense budgets or other Ministries), at this point it can reasonably be estimated that about €15,000 million of the current military spending of our country as communicated to NATO is, in fact, the exclusive result of “accounting artifices.” A truly impressive figure!
Finally, regarding the 2026 values, here there is substantial consistency with what is known; the indicated sum (€48,310 million, equal to 2.1% of GDP) is marginally higher than the previous year. As already pointed out in the 2026 Budget analysis, the Government had in fact set a cautious maneuver on the resources allocated to the sector; this with a view to then benefiting in the coming years from the instruments put in place by the EU, namely the Safe loan plus the National Safeguard Clause.
However, the last few weeks have definitively put this already fragile construction in crisis. Due to a series of factors (both domestic politics and related to international crises), the issue of increasing military spending has been “held hostage” by that permanent electoral campaign that often crosses the country. Thus triggering a sort of competition over who could oppose that increase the most.
Of course, in some cases different nuances are perceived, more structured opinions, more elaborated points of view; but in the end, when it comes to making certain choices, and evidently helped by polls that tell of an absolute majority of Italians opposed to rearmament, almost no one seems willing to pay the “political price” of those very choices.
And so, we can already say today that 2026 will be a “lost” year for defense, opening with possible turning points that, however, have not arrived and will not arrive. Everything is therefore postponed to 2027 and the following years; but without too many illusions. Because it is quite clear that our country is absolutely not yet mature on these issues; and without that necessary maturity, the chances of making rational choices remain very slim.
