Spain’s terrible record on defence spending

“SPAIN is very low,” Donald Trump said last month, referring to the country’s defence spending. For once, he was correct with his numbers. At just 1.28% of GDP last year, Spain comes at the very bottom of the NATO league table (see chart).

The government defends itself stoutly. Look at what the country does with the money and it is a “reliable partner”, Pedro Sánchez, the Socialist prime minister, responded. Its spending is rising sharply: it is on track to fulfil Mr Sánchez’s promise to reach the alliance’s target figure of 2% of GDP by 2029—though that target was, it should be noted, set in 2014 and most other EU countries have already achieved it.

The problem is that the target is already obsolete. With fears growing that Mr Trump may withdraw the American security guarantee from Europe, Spain is under intense pressure from its European partners to spend much more—and quickly.

Surprisingly, perhaps, the meagreness of Spain’s defence budget goes back to the days of Francisco Franco, the country’s dictator from 1939 to 1975, who having led the armed forces to power could ignore them. Military modernisation began only with democratic governments after Spain joined NATO in 1982. They abolished national service, created a professional army and bought American jets. But voters are unenthusiastic about military spending, and in the austerity budgets that followed the financial crisis of 2008, it fell to just 0.9% of GDP in 2014, the year Russia first attacked Ukraine.

“Defence policy has always been a problem for governments,” says Félix Arteaga, a retired officer now at the Elcano Royal Institute, a think-tank. “Nobody thought we had to increase military spending.” It is only in this decade that it has begun to rise again, and especially since Mr Sánchez hosted NATO’s annual summit in Madrid in 2022. The next year the defence budget rose by 26% in nominal terms. But reaching the 2% target requires nearly doubling annual spending (to €36.5bn). In normal times, that would be hard.

Unlike many stagnating European countries, Spain is growing at a decent clip of around 3%, so finding resources for defence ought to be possible. The problem is political. Mr Sánchez has led minority governments since 2018. He failed to gain approval for a budget last year and may fail again this year. That makes it hard to replicate the 26% rise in defence spending in the 2023 budget. By reshuffling budgeted spending, this month the government announced €400m in extra spending to raise Spain’s comparatively low military wages. But the lack of a multi-year budget makes defence planning and big new procurement deals harder.

When it comes to military beef, Spain performs better than it does on spending. At around 116,000 (due to rise by 7,000 by 2029), its armed forces are fairly small. But they are well trained and well equipped—at least by the standards of yesterday. Its hardware includes Eurofighter jets, transport planes and amphibious ships designed for force projection. Around 3,500 Spanish troops are taking part in NATO missions in eastern Europe, and others operate in UN peacekeeping. Mr Sánchez has been a staunch supporter of Ukraine’s resistance to Russia’s invasion. He visited Kyiv again on February 24th. Spain has sent tanks, trained 7,000 Ukrainian troops and this year, like last, approved €1bn for donations of munitions and missiles.

To face Europe’s deteriorating security outlook Spain needs stronger air-defence systems, new planes and tanks and much more investment in drones and cyber-warfare, says Mr Arteaga. Some of these are on track but others are not. A particular worry is Morocco, which claims sovereignty over Ceuta and Melilla, two Spanish enclaves in north Africa. In Mr Trump’s first administration Morocco became a favoured American partner. It is seeking F-35 stealth fighters and may get them. Mr Sánchez has spoken out against many of Mr Trump’s policies. But his officials trust in the strategic importance to the United States of Rota, a naval base in southern Spain where it berths up to six destroyers under an agreement renewed in 2023.

In rearming faster, the prime minister’s room for manoeuvre is limited by his hard-left coalition partners, who are anti-American and anti-NATO. The conservative opposition People’s Party supports a big increase in defence spending, but Mr Sánchez has been loth to seek its parliamentary support. Above all, the government wants to avoid having to cut social spending in order to fund defence, which might break apart his left-of-centre coalition.

Mr Sánchez now says that spending will reach 2% of GDP before 2029, though he hasn't said how. But Spain faces a moving target. Mr Trump talks of 5% of GDP while Mark Rutte, NATO’s new secretary-general, wants the alliance to approve “considerably over 3%” at its next summit in June; the favoured number is 3.6% or even 3.7%. Spain’s government insists that anything beyond 2% must come from European sources, in the form either of additional EU debt or the repurposing of existing EU programmes. Some of this may now happen. And conveniently it would attract little domestic opposition. ■

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