NOT REALLY AN OPT-OUT. Even if Pedro Sánchez has been crowing about his special deal on the 5% GDP spending target, the reality is a bit more complicated. In a letter to the Spanish prime minister, Mark Rutte said Spain has flexibility in how it spends its defence budget—as long as the Spanish military can deliver on the capability targets agreed with NATO. But Rutte also told reporters on Monday that Spain has committed to the new 5% target, stressing there’s “no opt-out” and that NATO doesn’t cut “side deals.”
CONFUSED? Rutte was pressed repeatedly to explain how Spain can spend less than the new baseline for allied defence budgets—Sánchez has pledged to stick with 2.1% – while still adhering to the 5% agreement. Rutte didn’t offer much of an answer, beyond saying that allies will need to report regularly on their spending progress – something they already do.
In the end, Sánchez highlighted the central issue: the deal is a political promise, not a binding commitment. There are no formal penalties for falling short. “NATO did not give Sánchez anything the others don’t already have: flexibility in how we spend our money,” one diplomat said. Still, Sánchez is expected to sign the summit declaration with the rest of the alliance on Wednesday, which will establish a new “Defence Investment Plan.”
IT’S ALL POLITICS. For Sánchez, this looks like a desperately needed win amid the chaos of Spanish domestic politics, as four NATO diplomats acknowledged. He’s trying to hold together a fragile coalition with the left-wing Sumar alliance, which includes NATO sceptics. A Spanish diplomat on Monday helpfully described the country’s position as “constructive ambiguity.”
GOOD LUCK. Sánchez maintains that spending just 2.1% of GDP is enough to meet Spain’s capability targets – the list of troops and equipment the country is expected to contribute to NATO’s collective defence. But NATO diplomats we spoke to are highly sceptical.
As Rutte put it at his pre-summit press conference on Monday: “NATO is absolutely convinced that Spain will have to spend 3.5% to get there.” One diplomat added warily that Madrid may have found ways to hit past targets more cheaply than others, “but it will be impossible this time around.” Jealous? Maybe.
BY THE WAY: NATO’s new accounting formula could expose some allies for spending even less on hard defence than currently claimed, as some of their more “creative” budget lines are reclassified under a new “defence-related” category. Our reporter Charles Cohen explains here.
RUSSIA IS A THREAT. The draft summit declaration recognises Russia as a “long-term threat to Euro-Atlantic security.” According to a source, this language was carefully chosen to accommodate the Trump administration’s refusal to support stronger wording.
Although NATO allies promised last summer to revise their strategy on Russia by this summit, it hasn’t happened, as Euractiv previously reported. And it remains unclear when it will. US uncertainty over how to reframe the NATO–Russia relationship is the main reason, sources say – especially since Washington’s efforts to mediate a peace deal between Ukraine and Russia have put it in a delicate position.
Mention of CHINA is notably absent from the summit declaration. One diplomat said the communiqué focuses on NATO’s “core business” – which evidently doesn’t include Beijing. Two others echoed the point, noting that prior declarations on China’s military build-up, possible expansionist ambitions, and support for Russia’s war effort still stand.
Still, it’s surprising to see China left out entirely, especially given US rhetoric about pivoting to the Pacific and growing concerns over Taiwan. Several insiders told Firepower that NATO’s China policy has slid off the agenda since Trump returned to the White House, in part because his administration hasn’t staffed up with China experts. That leaves unclear when – or if – the US will renew its push for the alliance to monitor Chinese investments in critical infrastructure such as ports and telecoms.
The declaration also states that AID FOR UKRAINE “contributes” to NATO security, a source familiar with the text confirmed. That means military assistance to Kyiv will count toward the 5% spending target, as Euractiv previously reported.
SO, WHAT NOW? When 32 world leaders meet in a stuffy (and heavily locked-down) conference centre, anything can happen. Will they stop being polite and start being real? Read our guide to the summit. Full agenda at the bottom of this email.
THE GUEST LIST: Donald Trump is expected to land in the Netherlands just in time for dinner with other leaders, including Zelenskyy. But of the four Indo-Pacific countries invited to join the King both the Dutch one and the Donald – only New Zealand’s PM is attending. The other three pulled out, scuttling a possible post-summit sit-down with Trump and Rutte.
Japan’s Shigeru Ishiba cited “various circumstances” when he backed out at the last minute on Monday – but the Japan Times noted Tokyo also cancelled other US talks after the Trump administration last week demanded Japan increase defence spending.
Australia’s Anthony Albanese may be returning the favour after Trump stood him up at the G7. Relations remain tense over tariffs and trouble with the AUKUS submarine deal. And new South Korean President Lee Jae-myung backed out due to "urgent domestic issues" as well as "growing instability in the Middle East", something Trump's had a hand in. | 
