Defense minister: NATO could reach 5% of GDP spending target in five years

NATO member states are currently discussing a plan to raise defense spending to 5 percent of GDP by 2032 — a goal that, according to Estonian Defense Minister Hanno Pevkur, would represent the bare minimum from the Baltic perspective.
Let's start with decisions that directly affect Estonia. An agreement has been made with the Italians to bring their air defense system to Estonia. When will this happen and what exactly does the agreement entail?
Yes, today (the interview took place on Thursday — ed.) there are two very important agreements. First thing in the morning, we finalized one with Italy, which will be carrying out the next air policing rotation for us. I've been saying for some time now that the air defense rotations agreed upon already in Vilnius (at the NATO summit two years ago — ed.) need to start functioning properly. Ideally, each air policing rotation should be accompanied by an air defense component. That's exactly what Italy is doing.
With their autumn rotation, when they arrive in Estonia, they will also bring their long-range air defense system. This is especially important for Estonia from a learning perspective. It gives our Air Force additional experience with what a long-range air defense system entails. It's also a step forward from the NASAMS system the Spanish brought previously. Considering that we are in the early stages of developing our own ballistic missile defense capability, the arrival of the SAMP/T system in Estonia is a major step. (Previously, the Spanish brought their air defense system to Estonia as part of a rotation. While NASAMS is a medium-range system, SAMP/T is long-range, and Estonia is considering purchasing a similar one — editor's note.)
I don't know if this is a classified detail or if it's something that can be shared, but is it a single launcher? How large is the unit they're bringing?
What matters is that they're coming with one battery. The exact number of launchers in the battery isn't all that important. The entire system will be included, which means more than a hundred personnel will be coming with it. It's a substantial system, and it will definitely be very beneficial for us.
The second important agreement was joining the CV90 coalition. Essentially, all of the Nordic and Baltic countries — except Latvia, which recently decided to go with the Spanish ASCOD — are moving toward ordering a fully integrated, next-generation CV90. Right now, we have the CV9035 Mark 3 in use by our scouts. But the new generation, the Mark 4, could become the common platform for all of the Nordic and Baltic countries, which would give a significant boost to interoperability, spare parts availability and maintenance.
Is this intended for the Scouts Battalion, which currently uses them, or is it simply for modernization? Why do we need new armored vehicles?
Yes, the CV90s we currently have were, as you'll remember, acquired used from the Netherlands, and their service life is nearing its end. In order to be ready to equip the Scouts with new combat vehicles, a new contract is necessary. But we definitely don't want to send the existing CV90s to the scrap heap — we want to preserve them. They'll remain in our inventory. So essentially, Estonia will retain enough combat vehicles for two battalions.
How large could such a procurement be? Is there any clarity yet on how many of these armored vehicles we might buy?
The capability development plan is more or less clear. I'm talking about the entire procurement here. Across all the countries involved, we're talking about around a thousand CV90s, give or take, for the whole Nordic and Baltic region. It's a very large procurement. Our interest, of course, is that this kind of joint order results in a better price for us and, as I mentioned, greater interoperability. Hopefully, it will also lead to favorable delivery times.
What we entered into today is a preparatory phase together with the others, and by fall, each country will get an answer from the manufacturer about delivery timelines, terms, exact pricing and everything else. So, the financial commitment would likely come in the fall, but in order to move forward now, we had to join this joint coalition, and I believe it was the right and necessary decision.
Today, NATO also agreed on its overall capability targets. Was there anything new in this agreement for Estonia or were these goals already known to us? Do we need to expand our defense forces? Buy additional equipment? What is being asked of Estonia?
The main objectives specifically related to Estonia were more or less finalized already in April, which is why we were able to begin the budget process at the government level that same month, saying we would need more than 5 percent in defense spending. That's where the decision came from that defense spending will be 5.4 percent starting next year. So as of today, nothing has changed in that regard.
But what's definitely important is that all allies have now said yes, we're committing to meeting these goals. That, in turn, lays the groundwork for the Hague summit, where the discussion will focus on the 5 percent defense spending level — highlighting that at least 3.5 percent or more of that should go toward traditional defense spending. The remainder would be allocated to areas like cyber defense and infrastructure, which also contribute to meeting capability targets.
As you already mentioned, the NATO secretary general has also talked about a new defense spending level — 3.5 percent for direct military defense and 1.5 percent for other areas, which in Estonian we might call broad-based national defense — adding up to 5 percent in total. From what I've heard, the goal is to reach that level by 2032. Is what I just described more or less what the Hague agreement is aiming for? And is this timeline acceptable to Estonia?
For us and our Baltic neighbors, this would definitely be the bare minimum — an essential agreement, if it ends up being adopted. I said today that, in fact, we should aim for 5 percent within five years, because the reality is what it is. We know Russia's plans, and we have to take them seriously, which is why our own plans are moving much faster.
Secondly, this is by no means finalized. It's not the case that leaders can just show up in The Hague and rubber-stamp the agreement. No. There are countries that want a longer timeline. There are others calling for more flexibility. For example, in Germany's case, their budgeting and overall economic structure is a bit different because they are a federal state, and much of their budget and economy is handled at the state (Länder) level. So if Germany were to raise its defense spending to 3.5 percent quickly, that would amount to nearly half of its federal budget — a very difficult step to take. But they may be able to reach 3.5 percent over time.
So these issues are still up in the air — the timeline and the exact breakdown of what falls under that 1.5 percent. Will it cover truly broad-based national defense or just narrowly defined defense-related expenditures? Those details are still being worked out.
Some major powers seem to agree with the target in principle. As you described, there are various technical reasons why it may be difficult for them to reach it, but they are at least working toward it. Then there are others where I wonder whether they're even trying. What are the Italians or Spaniards saying in these meetings? Do they also agree with the idea of setting that goal or are they still skeptical?
Around the table today, most participants said they're ready to move forward with the plan. The discussion is more about timelines, interim steps and certain nuances. The United States was very firm today. Pete Hegseth, with whom I also discussed this topic directly, made it clear — they're not backing down. There's no point in entertaining the illusion that the U.S. will come to The Hague and say, "Let's do 3 or 4 percent." No. Five percent is the target we need to reach at The Hague.
Yes, the timeline is still open to negotiation, as is whether the exact split will be 3.5 and 1.5 percent and how to define what counts as supplementary defense spending. But there is a clear understanding on one point: the existing definition of defense spending will not be reopened. What we currently classify as defense spending — under NATO's agreed-upon 2 percent target, which is likely to rise somewhere between 3 and 4 percent, probably closer to 3.5 — won't be redefined. Otherwise, the entire debate would lose its structure and clarity.
Speaking of U.S. Defense Secretary Pete Hegseth — he wasn't present on Wednesday, even though a meeting of the Ukraine Defense Contact Group took place here. That group was originally initiated by the Americans. How should we interpret that? Is it a signal from the U.S. that military aid to Ukraine is now essentially entirely up to the Europeans?
That's exactly what the Americans said during the meeting — that the contributions they've already committed to won't be rolled back, but Ukrainians shouldn't expect anything more beyond that. It has to be understood that President Trump's team has one clear and overriding goal: to first reach a ceasefire and then a peace agreement by pushing both sides — Russia and Ukraine — to the negotiating table. Ukraine has never opposed this approach. Even during our meeting in the NATO-Ukraine Council, Ukrainian Defense Minister Umerov stated very clearly that they are unconditionally ready for a ceasefire right away. The only condition is that leaders must come together and decide on it quickly.
Of course, the first step of any ceasefire should include the unconditional exchange of all prisoners, including the return of fallen soldiers. That should be the initial agreement, from which further progress can be made. But we must all accept that if we want to support Ukraine, it's up to Europe now.
What is America's role — not in terms of supporting Ukraine, but within NATO as a whole? What are they saying? Hegseth seemed fairly satisfied with what Europeans are doing to raise defense spending. Are the Americans committed to Europe's defense? Or is there still talk of them gradually pulling back from this part of the world to focus on China?
They are focusing on China — that's clear and beyond doubt. They're signaling everywhere that the United States can't monitor or control every region of the world. Their view is that Europe has enough strength to take responsibility for its own security. And I have to agree with that — Europe does have the capacity. The issue is simply that Europe needs to do more.
The U.S. is primarily focused on containing China, and the thinking is that doing so will help keep global peace more or less under control. On the other hand, this also means the Americans are reviewing their force posture in Europe. When exactly they'll do that — this summer, late summer? We can probably expect some clarity by the end of August, in September or possibly October. One thing has been agreed on: there won't be any surprise announcements. Allies will be informed in advance about the U.S. force presence in Europe. But it's safe to say that it will likely be reduced.
Thinking back to the defense plans agreed upon at the Vilnius summit two years ago, we've now reached the point of setting capability targets to actually implement those plans. Is Estonia satisfied with where we are? Can we say with confidence that there are no more gaps in the defense plans?
We can be satisfied with what's written in the defense plans and the capability targets, because those have largely been developed in close cooperation with Estonia. The greatest threats we face are clearly addressed there. What we absolutely cannot be satisfied with is the pace at which things are moving. Our goal is to reach 5 percent defense spending within five years — that's quite ambitious and there's a good chance we'll see different numbers in reality. We would like to see faster progress. But not all countries can keep up.
We've heard from various countries that, domestically, defense isn't even a topic of discussion in many places. From their perspective, there are other, more pressing issues, and your average European still feels relatively secure. The picture varies greatly. That's why we emphasized that the threat from Russia cannot be underestimated. We need to explain within our societies why these defense expenditures are necessary. No one is spending taxpayer money on defense just for the sake of pouring metal into weapons. These investments are being made so that the entire alliance can remain prepared to continue ensuring the peace that has lasted for nearly 80 years.
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Editor: Marcus Turovski, Mirjam Mäekivi