The spending boost follows similar overtures from Italy to court the US.

Spain will meet the 2% NATO spending target this year, up from 1.4% last year, after unveiling a new EUR10.47 billion military investment plan.

The additional funding, intended to supplement the existing 2025 budget, will be raised through “savings and surpluses” without raising taxes or impacting welfare, the Prime Minister of Spain Pedro Sánchez announced on 15 April.

The increase aims to address the worsening international situation, bolster its support to allies, and boost its domestic industry, the prime minister said.

Within the EUR10.47 billion investment plan, 35% will be spent on personnel, training and equipment for the armed forces, especially on modernising “land and sea combat systems”, while 31% will go towards acquiring new advanced capabilities.

These include new satellites, radars, and antennas; civil and military cybersecurity equipment; cloud and quantum computing; 5G; and AI. Encrypted telecommunications equipment will also be modernised.

In addition, funding will be allocated towards new “deterrence systems and dual-use capabilities”. Little detail regarding what this entails was provided in the plan, although, the prime minister did say that the investment was intended “not to attack anyone – Spain is a pacifist country that believes in diplomacy – we will do it to deter those who might be thinking of attacking us or attacking Europe”.

The majority of the investment (87%) will be spent with Spanish companies, while the remainder will be spent with European firms, he added. 

Spain and Italy are both defence spending laggards in NATO, spending just 1.4% and 1.49% respectively last year.

Notably, both announced in April defence spending increases to reach the 2% NATO target this year, following calls from NATO and the US to increase spending. Although neither country is utilising the new EU debt exemption to fund this, which allows members to spend beyond the traditional fiscal rules set by the EU.