“5% of GDP for defense for NATO members. Is this trolling from Trump or an objective necessity?”: the expert’s answer

In today’s world, which is rapidly changing due to global conflicts, international aid remains a key element in maintaining security and stability. For Ukraine, which has been fighting for its independence and territorial integrity for almost three years, the support of its partners is critically important. At the same time, aid to Ukraine illuminates the deeper problems of preparing the civilized world for new challenges. Donald Trump’s proposal to increase the defense spending of NATO countries to 5% of GDP provoked a wide discussion, because it raises the question of the readiness of democratic states to adapt to the new reality.

Mykola Havrys, candidate of economic sciences, director of “Pozitiv” AF expressed his vision regarding the initiative of the US President-elect Donald Trump, who proposed to increase NATO defense spending to 5% of their GDP. This proposal has caused considerable controversy, because it exceeds the current norm of 2% of GDP, and even the discussed level of 3%, which many consider difficult to implement. Havrys explains why this initiative looks radical, but has a rational basis.

What is 5% of GDP on defense

“Five percent of GDP for defense for European NATO member countries. Is this trolling by Donald Trump or an objective necessity? The US president-elect demands that the European allies of the Alliance increase defense spending no longer to the current 2% standard for these countries, and not even up to 3%, which has been discussed more and more recently, but up to 5% of GDP.

From non-specialists, you can often hear the opinion that this is not such a big problem. Well, it was 2%, but in fact for many European countries it is significantly less, now it will be 5% — not a big deal. However, in the modern objective reality of many European NATO members, maximally peaceful, demilitarized and socially oriented states, this is a huge, practically unsolvable problem in the next decade, unless, of course, they start a war. Then there will be money for everything, but it may already be too late.

Once again, we will note separately that it is a percentage of the gross domestic product (GDP), that is, the value of all final products, goods, works and services, not intended for further processing and resale, produced by residents of a certain country during the year. These are not percentages of the state budget – the difference is huge.” – emphasizes Mykola Havrys.

The expert emphasizes that defense spending is calculated as a percentage of the gross domestic product (GDP) — the total value of all final goods and services created in the country in a year. This is significantly different from the share of expenses in the state budget. He gives an example: in 2021, the nominal GDP of Ukraine was about 5.5 trillion hryvnias, and budget revenues were only 1.3 trillion hryvnias, which was 24% of GDP. In 2023, due to a full-scale war, these indicators changed significantly: budget revenues reached 41% of GDP, and defense spending exceeded 30% of GDP.

Havrys notes that such extreme indicators are typical only for countries that are at war. For peaceful European countries, such as Germany or Italy, achieving defense spending of 5% of GDP seems almost impossible without serious redistribution of resources.

Why it is difficult for NATO countries

The expert emphasizes that Germany is one of the key examples. In 2023, it spent only 1.64% of GDP on defense, which is equal to $73.17 billion. Even in 2024, when these costs increased to 2.14%, the country faced great difficulties. To reach 5% of GDP, Germany would have to spend an additional 130 billion dollars, which exceeds the entire nominal GDP of Ukraine for 2024. This would require either a sharp increase in taxes or a significant reduction in social spending, a politically difficult decision.

The United States faces similar challenges. Despite the fact that the US defense budget is the largest in the world, in 2024 this expenditure was only 3.36% of GDP, or $967.7 billion. To reach 5%, the United States would have to find an additional 470-600 billion dollars, which is also a difficult task even for the largest economy in the world.

What does the situation look like in Ukraine and the Russian Federation

According to the expert, Ukraine’s defense spending from the state budget in 2024 was at least 21% of GDP. If you take into account foreign military aid in the form of weapons, ammunition, ammunition, intelligence, the cost of training the Ukrainian military, as well as donations from Ukrainians and international benefactors, the real figure exceeds 30-32% of GDP. According to various estimates, Ukraine’s total defense spending in 2024 will reach $64.8 billion. For 2025, the budget foresees unprecedented spending on defense and security — 26.3% of GDP, which is equal to UAH 2.23 trillion. Half of this amount will be spent on paying the military, which may increase the real share of defense spending.

“You won’t surprise Russians with spending on “defense” of 5% of GDP today either. Although they are still trying to fool the Americans, calling the war unleashed by the Russian Federation a “special military operation”, a kind of pacification of rebellious rebels from the periphery in order to humiliate Ukrainians, spending on their attack ministry and other organizations and institutions directly or indirectly connected with hostilities and internal security, testify to something completely different.” – thinks Havrys.

He notes that Russia spends significantly more on defense than many NATO countries. In 2024, these costs amounted to 5.4–6.4% of GDP. In 2025, even formally, these costs may exceed 7% of GDP. This is even more than the indicators of the Soviet Union at the end of the Cold War. After all, for example, in 1989, its defense budget was 77.3 billion rubles. from 494.8 billion rubles. of the general budget and 1,606 billion rubles. nominal GDP. Therefore, the share of military expenditures in the gross domestic product was equal to 4.8%. At the same time, Havrys believes that for modern civilized countries that are not in a state of war, spending 5% of GDP on defense in the 21st century may appear to be frankly barbaric.

Are there countries capable of fulfilling Trump’s demand?

According to the expert, among the European NATO countries, Poland, Lithuania, Latvia and Estonia have the best chances to spend 5% of GDP on defense. These countries take the threat from Russia seriously and are already demonstrating a high level of defense spending. Poland, for example, spends more than 4% of GDP and plans to continue to increase this spending. At the same time, countries that do not share borders with Russia, such as Italy, Spain or Portugal, are less interested in significantly increasing defense spending.

Mykola Havrys believes that Trump’s initiative looks more like a political signal than a real demand. It emphasizes the need for the democratic world to adapt to new security challenges. The expert emphasizes that the war in Ukraine has become a lesson for the whole world: security is expensive, but ignoring it is even more expensive. At the same time, the implementation of this proposal will require not only financial resources, but also political will.

The proposal of 5% of GDP for defense has a rational basis, but its implementation will depend on how quickly NATO countries will understand the need to adapt to the new reality. Ukraine has already shown that survival requires significant sacrifices, and now the democratic world must make a choice whether it is ready for such changes.