PM Pedro Sánchez goes it alone and increases Spain's defence spending to 2% of GDP

Mateo Balín

Madrid

Wednesday, 23 April 2025, 17:45

Spain will reach 2% of GDP defence spending in 2025. Prime minister Pedro Sánchez made a surprise appearance at the Palace of Moncloa on Tuesday to announce the approval by the cabinet of a significant, extra investment of almost 10.5 billion euros that will allow Spain to reach Nato's objective and fulfil the commitment made by ex-president Mariano Rajoy's office in 2014.

On 6 March, following the extraordinary summit of European leaders that addressed Europe's security and rearmament needs in response to Donald Trump’s closeness to Vladimir Putin, the head of the Spanish government already said that he would focus on reaching Nato's objective as soon as possible, as demanded by the EU and the Atlantic alliance.

Until now, it was not clear what rate of growth he would propose or whether he would wait for the European Commission to decide whether to implement a non-repayable financing instrument.

Today is the deadline for submitting the military spending forecasts for this year to Nato and Sánchez has taken the opportunity to demonstrate to the allies that his commitment is firm despite internal difficulties. "What is at stake is something as serious as the security of Europe and Spain. Our partners are counting on us just as we were counting on them when we proposed solidarity during the pandemic," said Sánchez. The president has been aware that his decision would generate controversy. However, he justified it by stating that "a majority of citizens wants solutions, not sterile or self-serving controversies".

The Spanish PM is also aware of his lack of parliamentary stability and will not submit his plan to a vote in the congress of deputies. According to the law, he is not obliged to do so, because the financial injection that will allow Spain to jump in just one year from 1.4% (the military spending reached in 2024 according to Nato’s final data) to 2%, meaning 33.1 billion, will not involve an increase in the national budget.

The increase will be financed through the reorientation of some items of the recovery plan, such as the one earmarked for cybersecurity; through the savings generated by "the good performance of economic policy"; and through the margin provided by the folders included in the 2023 budgets, doubly extended, which are "no longer needed", for example, compensation to the regions for the fall in tax revenue during the Covid pandemic.

Nevertheless, Sánchez did pledge to appear before the lower house of parliament in May. He will have to work hard to convince not just the opposition, but also the majority of forces that backed his investiture, of the merits of a plan that does not even have the unreserved support of the entire government, as demonstrated by the observations made by left-wing party Sumar at the council of ministers.

Sumar's Yolanda Díaz's said that "as a whole, the plan involves an enormous dedication of public resources to military spending that does not respond to a vision that arouses consensus within the government and does not seem to meet the objectives of procuring a European policy based on strategic autonomy capable of providing Spain and the EU with an adequate response capacity to the challenges posed by the current geopolitical situation". However, the socialists stated that their disagreement mainly concerns one of the points, related to the manufacturing and purchase of weapons, which accounts for 19% of the total spending.

The prime minister defended spending on defence as "necessary". "Although we may not like it, there are state and non-state enemies who can only be deterred in this way. We did not choose this international situation marked by uncertainty," said Sánchez. He also stated that this allocation only represents a fifth of the approved investment.

Of the 10.5 billion euros in the plan, another 35% will be allocated to improving the working conditions, training and equipment of the military forces, "to bring them in line with those of the most advanced EU countries"; 31% will go to developing and acquiring telecommunications and cybersecurity capabilities; 17% to strengthening the army's role in managing emergencies and natural disasters, such as floods or fires; and the remaining 3.14% to improving the security conditions of the almost 3,000 troops that are involved in Spain's 16 peacekeeping missions abroad, under the flags of the EU, Nato or the UN.

Sánchez also emphasised that his plan complies with the commitment not to take a single euro out of welfare state spending, not to raise taxes and not to increase the deficit. He also said that 87% of the investment will stay in Spain, while 13%, which is a significant amount, will go to the European industry. According to the prime minister, however, everything will result in a new economic stimulus for Spain. He put the return on the large investment at an increase in national GDP of between 0.4% and 0.7%, an 18% increase in R&D&I investment and the creation of 36,000 direct jobs and some 60,000 indirect jobs, most of them with salaries and qualifications above the national average.